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Refund
Anticipation Loans is what is know as rapid refunds. You
walk into to have your taxes done and you walk out with a check.
This simple transaction is often extremely expensive and should
only be used in two cases: you can't wait for the money or you
just don't care that it cost a lot. Other tax serves won't
tell you this but, for most people, these loans are not a good
idea. The problem is that most refunds are processed by
the IRS within about 10 days so the extra fees your charged is
for a 10 day loan. This short term can cause APR’s to be
as high as 700%.
On-the-Mark Tax
Service believes that individuals should have options available
to them including refund anticipation loans. However, we
also recognize we have a moral obligation to ensure that bad
decisions are discouraged and the implications of electing these
loans are fully understood. This is why we provide full
disclose not only of the cost but we put it in terms of an
Annual Percentage Rate on a 10-day loan. We also refuse to
promote these loans as smart options or something that everyone
does.
Unfortunately
other tax services do not attempt to keep their customer
informed. In fact those with lower incomes often find
themselves subjected to unscrupulous corporations who take
advantage of their economic plight rather than providing
services for their benefit. The most egregious practices are
evident in the rapid refunds which prey on those living paycheck
to paycheck.
Certain
corporations utilize the rapid refund loans and specifically
target lower income to get their “piece of the pie.” This
tactic is owed to the creation of the EIC program which was to
ensure our country’s poorest members, who chose to work rather
than utilizing public assistance, were able to make ends meet.
H&R Block and others exploit these people receiving EIC by
utilizing their lack of connections and limited experience to
siphon off a portion of the return which is grossly
disproportionate to the service they provide. These
amounts are often utilized annual APR ranging from 70% to 700%
interest for their “rapid refund”. They also utilize lack
of disclosure of fees and disinformation to obtain fees that the
client might not otherwise pay.
The techniques
used to manipulate are simple. The Tax Preparer never
discloses the fees until the client’s taxes are completed.
When the taxes are completed the refund amount less the fee is
what is first disclosed to the client. It is at this
point, after the service is completed, that a persistent client
will be able to find out what the cost was for having his taxes
prepared. This technique accomplishes two things; first
the client feels obligated to purchase the service seeing the
tax preparer took the time to do the taxes and second it
prevents the client from shopping around to find the best deal.
The economically challenged often lack the connections to know
that there are other options out there or that they are being
overcharged. Additionally some don’t even know that they
can walk away with out paying.
The next step is
the sell on the rapid refund. Clients are often told it
will take up to six weeks to receive their refund if they don’t
utilize the rapid refund. This seems like an eternity for
someone living pay check to paycheck and this information is
very misleading. Refunds only take six weeks if they are
mailed in and the IRS cuts a check. The client can
electronically file his return and within 10 to 14 days the
money is deposited directly into their account. It is here that
individuals are paying huge fees often with no knowledge of how
much they paid to receive their refund a few days sooner.
Unfortunately the money meant to take care of someone's family
is used to pad the pockets of Tax Preparation Companies
We believe that a
business to be successful, should not be deceptive, should not
keep his clients in the dark, should not prey on weak.
Businesses which have to do all these things to survive should
reconsider whether they should be in business at all.
On-the Mark is providing an alternative to these other tax
services. We utilize up-front pricing and ensure that our
clients know all the costs and benefits of their choices.
We place our clients first and with that approach we will become
the leading tax service in Columbus, in Ohio and in the United
States.
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