Elliot Spitzer Sues H&R Block for Tricking Customers

New York Attorney General Elliot Spitzer sued H&R Block today for fraudulent IRA marketing.

Here’s an .mp3 link as to why.

“The suit alleges that the H&R Block Company steered hundreds of thousands of its clients…into IRAs that were virtually guaranteed to lose money because of a combination of hidden fees and low interest rates.”

For instance, an old man was charged a $15 account opening fee, a $10 account maintenance fee, and a $25 closing fee when the account was closed after 18 months. These fees dwarfed the interest earned on the account ($5.18) and he ended up losing 15 percent on his investment.

“Spitzer
s lawsuit specifically alleges that H&R Block…failed to adequately disclose its fees to its customers, failed to warn that the interest paid would not cover the fees in certain instances, and misleadingly described the interest rates as “great” when they were at times less than one percent annually.”

See, we knew there was a good reason why H&R Block got nominated for Worst Company in America. Likewise, a good reason why once again we’ll be turning to our old friend Turbo Tax this year.

Press Release [via Blogsnow]

Comments

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  1. Rick Dobbs says:

    Unless you get really lucky at H&R Block and get someone who is pretty seasoned, you’re mostly just getting a secretary who’s going to fill out their software forms for you.

    This year we actually paid for H&R Block to do our taxes after doing them on TurboTax. We had a good tax year and figured that maybe H&R Block might be able to find some more money for us.

    TurboTax cost us $49 (I think) and gave us $700 more in refund than the $312 bill we had at H&R Block.

    ’nuff said.

  2. RaginCajun says:

    When is Spitzer going to sue Consumerist? You’ve got to be doing SOMETHING sue-worthy, right? Don’t you feel a little left out?

  3. Ben Popken says:

    We weren’t aware that we were actually doing anything.

  4. Bubba Barney says:

    I had to use HR because I wanted to claim my mortgage interest. I’m a first time homebuyer. The guy I got at HR was awesome and managed to get me about 1400 extra by claiming some school deductions. He even called my school for me to get some info. My experience with them was very good.

  5. Dan Bock says:

    I worked at H&R Block until last year. Block made it very difficult to find out what the fees were, even for the tax preparers, who were supposed to be selling the IRAs (and making a commission – $5 per new IRA, I think). One slow day, a colleague and I spent an hour reading through the pages of fine print in the IRA agreement, looking for any info on fees. Finally we found it: “Fees are charged according to the current fee schedule.” We couldn’t find that schedule – I guess you have to be Eliot Spitzer to find that!

    I never did sell one of those IRAs. I would never do something so terrible to a customer.