A tax refund won't be the only reimbursement some customers receive from H&R Block this year. New York Attorney General Andrew Cuomo announced on Jan. 4 a settlement with the tax preparer over money-losing IRAs it marketed and sold to consumers.
Express IRAs carried fees that were higher than the interest they earned--advertised as "great" though at times it totaled less than 1 percent. Since 2000, H&R Block sold more than 600,000 of the IRAs, 85 percent of which lost money. The accounts were primarily marketed to low- and middle-income clients.
H&R Block will refund between $11.4 million and $19.4 million in fees to customers nationwide. Existing Express IRAs will be rolled over into an IRA program that doesn't charge fees.
"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.
H&R Block did not respond to a request for comment.