States settle with H&R Block

H&R Block Services, Inc. has agreed to establish a fund to reimburse clients who paid for the tax preparation company’s “Peace of Mind” guarantee, but may not have wanted to purchase the optional service. Florida, 39 other states and the District of Columbia agreed to join the settlement negotiated by the Ohio Attorney General’s Office.

The agreement concerns H&R Block’s guarantee to pay up to $5,000 of any additional income tax owed due to a preparer’s error. The attorneys general said Block added a fee of $22 for the guarantee to all consumer tax return preparation invoices without first obtaining the consumer’s affirmative acceptance. Block denies that it violated consumer protection statutes and maintains that it did not deprive its customers of the choice.

Block is establishing a fund of $1 million for refunds to eligible consumers who had a tax prepared at an H&R Block office in tax season 2001.

Under the terms of the settlement H&R Block will seek a consumer’s affirmative agreement before charging for the guarantee in the future. The company may not make a representation that it “recommends” purchasing the guarantee until the customer has been provided the material terms and conditions of the guarantee. The company also agreed to reimburse the states for the cost of bringing the action against the company.

To be eligible, consumers must have had a tax return prepared in the 2001 tax season, been charged for the guarantee as an additional component, never utilized the guarantee and believe they were never informed that the guarantee was added for a fee to their tax preparation service.

Eligible consumers must make a request either by phone to a toll-free number or by the website created for customer refunds requests.

  Telephone:  1-866-522-7083
  Website:  http://www.hrblock.com/customer_support/pom.jsp (English)
                  http://www.hrblock.com/customer_support/pom_es.jsp (Espanol)

Consumers must make their application for refund within 120 days of the date of the agreement between the states and H&R Block, or August 22. For those who elect to accept any reimbursement, coverage under the “Peace of Mind” guarantee would cease.