Controversies involving H&R Block

H&R Block Inc., a U.S. based accounting firm founded in 1955 has had a number of controversies surrounding a number of financially related practices and issues.

Specifically, H&R Block Inc, has had multiple class action and other law suits filed against it, has been criticized for unethical and/or illegal charging of fees and/or business practice surrounding refund anticipation loans, poor tax reporting for its own company finances, and distribution of clients private data. In terms of consumer service, additional controversy is aimed at the quality of H&R Block's accounting services.

Image source: Wikicommons, US-PD

A look at the history of H&R Block reveals some of the concerns and controversy surrounding H&R Block's business integrity. This article will outline the sources and actions surrounding controversies involving H&R Block and then provide summary commentary based on the facts and testimonies surrounding these controversies.

Moreover, as with many large companies, litigation is sometimes an unavoidable event, which tends to make the question of controversy not so much as one of whether or not controversy exists, but rather if the controversy is justified to any level greater than the normal and/or average levels of litigation surrounding large companies.

U.S. Lawsuits filed against H&R Block

Many of the lawsuits filed against H&R Block took place in light of contention with the company's refund anticipation loan (RAL) program. The dispute in several of the lawsuits was that RAL's were in violation of lending laws and did not properly inform clients of the costs involved with such loans.

The list of lawsuits filed against H&R Block is large and those suits and settlements listed below do not comprise the total amount of legal actions taken in regard to H&R Block controversies over the past 13 years.

The majority of the following lawsuits and settlements are directed less against individual franchises of H&R Block and more against the parent company in regard to policies and practices endorsed by H&R Block. The following list serves to illustrate the existence of ongoing lawsuits against H&R Block, some of which are for similar or related practices.

2009 : New York appeals court allows attorney general lawsuit against H&R Block (Forbes.com)

2008 :Income tax refund class action suit against H&R Block (law.taragan.net)

2008 : Law suit against H&R Block for unfair and deceptive conduct (mass.gov)

2007 : Class action law suit filed against H&R Block for "violating federal banking laws" (lawcash.com)

2006 : Injunction filed by California Attorney General against H&R Block for misleading customers (CBS5.com)

2005 : $8 million settlement paid to consumer by H&R Block in response to numerous lawsuits regarding an H&R Block loan controversy (consumeraffairs.com)

2004 : Pennsylvania court allows lawsuits filed against H&R Block to escalate into class action lawsuit (consumeraffairs.com)

2003 : Settlement of $3.3 million for disputed tax guarantee (allbusiness.com)

2003 : Class action lawsuit against H&R Block contesting inducing of fee payment (allbusiness.com)

Customer and critic complaints against H&R Block

In the non-legal sphere of controversial sentiment aimed at H&R Block, numerous informal allegations and complaints have been directed toward the refund anticipation loan program and the misleading affects of H&R Blocks service to customers. One only type "Refund anticipation loans" into an Internet browser to reveal high ranked content lauding the buyer beware mantra in regard to these loans.

More specifically, among the many online organizations that publish their animosity toward RAL's are consumeraffairs.com, thenation.com, consumerreports.org, responsiblelending.org, the Denver post and freelance writers. It seems as though for every advertisement promoting refund anticipation loans there are many more complaints speaking out against these loans. The legal and public sentiment seems to err on the side of RAL's as conspicuous and/or dubious lending rather than a great way to get a refund fast.

Summary commentary

To summarize the controversy surrounding H&R Block, there certainly is controversy, especially in regard to refund anticipation loans. Looking at the chronology of the numerous lawsuits filed against H&R Block, it becomes apparent the company hasn't eliminated its alleged bad practices.

Granted not every lawsuit filed against H&R Block has been victorious, but the sheer magnitude of settlement money paid out coupled with consumer and independent watchdog warnings does raise a red flag on the company's reputation and quality of service.

Whether it be tax insurance for tax preparer errors, wrongful distribution of clients social security numbers, poor tax filing by the company itself or misleading and/or unethical lending practices, H&R Block remains in the spotlight of controversy. Why this controversy has gone on for so many years is another question, does the profitability of the company measure up despite such lawsuits or does H&R Block's administration simply not see an ethical violation in the controversies at hand.

Lawsuit and Consumer Watchdog References Consulted:


1. http://www.forbes.com/feeds/ap/2009/01/08/ap5897740.html
2. http://www.thenation.com/doc/20060501/yeung
3. http://www.consumeraffairs.com/news04/hr_block_suit.html
4. http://www.consumeraffairs.com/news04/2005/hr_block_payday.html
5. http://tinyurl.com/6b6zhux6.http://tinyurl.com/6z4ca42
7. http://www.allbusiness.com/legal/trial-procedure-suits-claims/10326123-1.html
8. http://tinyurl.com/d6ysvr
9. http://findarticles.com/p/articles/mi_qn4185/is_20081118/ai_n31017758
10. http://en.wikipedia.org/wiki/H&R_Block#Controversy
11. http://www.highbeam.com/doc/1P2-19433514.html
12. http://www.answers.com/topic/h-r-block-inc
12. http://blogs.consumerreports.org/money/2008/01/tax-refund-anti.html
13. http://www.consumeraffairs.com/finance/hr_block_ral.html
14. http://www.responsiblelending.org/issues/refund
15. http://www.thenation.com/doc/20060501/yeung
16. http://www.denverpost.com/popular/ci_11592826
17. http://tinyurl.com/4v7qy47