RALs at H&R Block

About 7.96 million taxpayers, or 5.5% of all individual federal tax filers, chose refund anticipation loans in 2008.

H&R Block facilitated 3.9 million RALs through its offices, with an average loan of about $2,890. A third-party lending bank funds the RALs offered through H&R Block.

To improve the product, H&R Block has:

  • Eliminated administration fees.
  • Introduced real-time, side-by-side disclosures to highlight the cost and timing of options available to the client.
  • Introduced plain-language disclosures to explain the product.
  • Enabled clients to cancel a RAL within five business days of choosing the product.

What Others Are Saying

H&R Block agrees with consumer advocacy groups that the best option for taxpayers is to e-file their tax return with the IRS and have their refund direct deposited to a bank account. In fact, for clients without bank accounts, H&R Block offers a prepaid debit card account at no cost that accepts direct-deposited tax refunds and can save an average taxpayer over $560 a year in check cashing and other fees.

While consumer groups continue to urge taxpayers to avoid RALs, they recognize that RALs offered through H&R Block provide better value than competitors’ for taxpayers who can’t or don’t want to wait, such as those who do not have a bank account to receive IRS direct deposit of their refund:

  • "In other good news, the price of RALs has declined significantly for some of the biggest players in the industry. …Block customers who received an Emerald Card last year can have their refunds direct deposited onto these cards, and avoid a RAL or RAC. …Block and JP Morgan's price reductions do represent a real and significant reduction in cost to consumers."
    • - Consumer Federation of America-National Consumer Law Center news release, Positive Improvements For Tax Refund Loans, But Consumers Still Warned To Avoid Them, Jan. 18, 2008
  • “This year (2007), a RAL for an average refund of around $2,500 will cost about $100 at some tax preparers, translating into an effective APR of 150%. However, H&R Block has lowered the fee for RALs in that range by 40%, to $60. H&R Block does not charge an application fee, but some other franchise offices of commercial chains, as well as independent tax preparers, may charge a fee. H&R Block has unveiled a new electronic debit-card based bank account in which customers can direct deposit refunds, a less expensive option than a RAL.”
    • - Consumer Federation of America-National Consumer Law Center news release, Jan. 16, 2007