The cock just keeps rocking at the H&R Block terrordome.
NY Attorney General Elliot Spitzer announced yesterday he had evidence the H&R Block’s executives not only knew the company wheedled customers into money-losing retirement plans, but they also systematically punished employees refusing to recommend them.
Emails from managers ignoring complaints from tax preparers about the deceptive marketing of Express IRAs are in Spitzers hands. The internal documents exhort employees to “sell more IRAs” or “there’s the door.” The LA Times reports:
- “Court papers say the amount of money in the retirement account decreases because the only investment option is a money market account with an interest rate so low that it does not cover the fees — “fees that H&R Block fails to adequately disclose.”
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 claims that of the more than half a million Express IRA accounts opened, 85% failed to earn more in interest than was paid to H&R Block in fees.
For their part, H&R Block said they, “[look] forward to the attorney general’s office presenting its case in court rather than through the press.”
“Spitzer Says H&R Block Urged IRA Fraud” [LA Times]
Previously (Mar 16): “Elliot Spitzer Sues H&R Block for Tricking Customers“