Kingsville, Texas (June 26, 2003) -- A Texas state judge has approved a settlement to a class-action suit charging that tax preparation giant H&R Block received referral fees from Household International Inc., the bank issuing refund anticipation loans to Block customers.
Under the terms of the settlement, in which the company denied any liability, Block will provide some 700,000 customers in Texas with five years of coupons redeemable for about $375 of services at Block outlets. If all the coupons are redeemed, the value of the settlement would be roughly $262.5 million. In addition, Block agreed to pay the plaintiffs’ attorneys fees in the case of $49 million, of which $26 million will be refunded to the class.
In a statement Block said, "We believe that the settlement in Texas is fair, and the court's ruling today confirms our view.”
A similar court case is pending in Chicago, were Block is alleged to have misled customers about finance charges on the loans and to have received referral fees from the issuing bank.
In April, a U.S. District Court in Chicago refused to approve a $25 million cash settlement agreement in that case.
Since 1992 Kansas City, Mo.-based H&R Block has been sued in some six states over its RAL program.
-- WebCPA staff
