The activists are with ACORN (Association of Community Organizations for Reform Now), and this is one of 30 simultaneous demonstrations in U.S. cities against H&R Block, alleging that the company earns windfall profits by issuing triple-digit interest refund anticipation loans (RALs) to working families. ACORN says H&R Block made over 5 million of these loans in 2002, leading to hundreds of millions of dollars in revenue
After some debate inside the Block offices, Indianapolis ACORN member Shirley Grigsby emerges to talk to the cameras. The company is not fully disclosing to their customers how unnecessary the loans often are, she says, especially to families who qualify for the federal earned income tax credit (EITC). “The EITC is something that working poor and middle income people rely heavily on,” Grigsby says. “And we have companies like H&R Block that deal in predatory practices in issuing rapid refund loans that can take that money away.”
NUVO called H&R Block spokesperson Linda McDougall, who said the company always discusses no-cost filing options before offering a loan. “Many consumers come to H&R Block for refund anticipation loans because we offer clear choices, fair prices and full disclosure,” McDougall said.
The folks at H&R Block’s Pennsylvania Street office are a little more blunt, eventually calling the police and kicking the ACORN members out of the building. The security guard said he was removing the activists because they were “getting smart” with Block customers. Which is ironic, because getting smart about their tax returns is exactly what the new Indianapolis chapter of ACORN (Dispatch, “An ACORN of Activism Germinates,” Aug. 13-20, 2003) is urging working families to do.
ACORN is joining with several other community organizations to spread the word that there are alternatives to heading to a private tax preparer for a loan. As anyone who has walked through a low-income neighborhood this time of year can attest, there are a lot of well-marketed temptations for folks to lose money on a quick refund anticipation loan.
This is the one time of year when low-income folks get an infusion of cash, often in the form of the federal earned income tax credit, which can provide as much as $4,204 per year to working families. These families often have poor credit and are in need of cash to pay the rent or get transportation to the job or daycare. All of which makes them easy targets for tax preparers in storefronts, check-cashing shops, liquor stores and used car lots. Some businesses spend the early months of the year circling around the working poor like vultures, offering tax preparation and immediate loans that can be turned into cash or down payments for a sparkling but lemon-y 1994 Chevelle.
Don’t do it, says ACORN and the Indianapolis Asset Building Campaign, a coalition including Congresswoman Julia Carson, Mayor Peterson and the IRS. There are better options, including electronic filing and a request for the IRS to deposit the refund directly into a bank account, which can shorten the refund process to only about 10 days.
Free tax preparation is available starting Jan. 31 through the many volunteers of the Asset Building Campaign, and the service is free to anyone who qualifies for the earned income tax credit. To find out about the times and locations for those tax preparation sites, call 926-HELP (4357).
“Why should we be charged interest rates in the hundreds or even thousands of percent range to be loaned money we are owed?” asks ACORN national President Maude Hurd. Good question, especially when there are alternatives.
For more information about Indianapolis ACORN, call 635-6277.