Start the New Year Right- Refuse that RAL!
As you’re making your resolutions for 2010, don’t forget to include this one on your list: avoid refund anticipation loans like the plague.
Refund anticipation loans involve taking out an advance on your tax refund. These loans are arranged by tax-preparation agencies, which means that they get to negotiate all the terms and fees and the consumer just gets the short-term loan and the long-term bill. In 2007, this translated into Americans paying $900 million in fees and interest rates in exchange for getting their refunds just ten days earlier!
In case you needed more proof about the abusive and predatory nature of these short-term loans, look no further than last week’s news that the Jackson-Hewitt Tax Service (second in the nation only to H & R Block) has been banned from issuing refund anticipation loans starting this year. You can read about it here and here in articles that have been featured on multiple business websites and which mentions AFFIL’s stance against these abusive loan products. This change is the result of regulators ordering Jackson-Hewitt’s parent company, Santa Barbara Bank & Trust, to stop providing money to fuel the RAL program, leaving Jackson-Hewitt unable to offer consumers this “service”. We say, good riddance!
Now, it’s up to you to make sure the other tax preparation agencies don’t get your money either. Say “No!” to an RAL this year and find an alternative source for your short-term loans.