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H&R Block settle IRA lawsuit in NY

Jan 12, 2010 Federal Tax Return

A shameless “cut and paste” directly from Reuters News:
NEW YORK (Reuters) – H&R Block Inc will pay as much as $20.2 million to settle a New York lawsuit accusing it of fraudulently marketing retirement accounts that caused hundreds of thousands of mostly lower-income clients to lose money. New York Attorney General Andrew Cuomo said the accord calls for the largest U.S. tax preparer to refund $11.4 million to $19.4 million of fees to customers nationwide who opened one of its Express IRAs, a type of individual retirement account.

H&R Block will also pay $750,000 in fines and other costs to the state, and convert Express IRAs into new retirement accounts that do not charge fees, Cuomo said. The size of the refund depends on the number of claims made, he said.

New York had accused H&R Block of steering more than 600,000 customers to Express IRAs, without disclosing hidden fees that wiped out the interest that 85 percent of them could earn. Eliot Spitzer, Cuomo’s predecessor, had first sued H&R Block over the marketing of Express IRAs in March 2006.

“H&R Block’s aggressive peddling of fee-laden retirement accounts that were virtually guaranteed to lose money needlessly cost families across the country millions of their hard-earned dollars,” Cuomo said in a statement on Monday.

Tags: Reuters