Jackson Hewitt Tax Service Inc., the second-largest U.S. tax preparer next to H&R Block, has ceased offering the "pre-season" loans that many officials and consumer advocates say took advantage of low-income individuals. Finance companies helping the firm provide the loans, granted to individuals based on information from their pay stubs, have exited the business. Financial backer Pacific Capital Bancorp, based in Santa Barbara, Calif., said Tuesday that it was discontinuing the pay-stub loan business; and London-based HSBC Holdings Plc, Jackson Hewitt's other finance partner, last month also stopped making such loans. Jackson Hewitt has decided to follow suit, the company said Tuesday, April 10, 2007, in a statement.
California Attorney General Bill Lockyer have criticized Jackson Hewitt's lending practices, maintaining they take advantage of low-income taxpayers' need for instant cash, and that they feature exorbitant interest rates. Approximately a third of Jackson Hewitt's customers took out some sort of refund-anticipation loan, analysts estimate. Jackson Hewitt in January said it would pay $5 million to settle claims it used deceptive marketing to promote its loans in California. Both banks said they will continue making other refund anticipation loans, which are provided to customers when their tax returns are filed and are based on the expected refund.
About Preseason Loans
Preseason loans are short-term loans based on a tax-payers anticipated tax-refunds. They are estimated based on pay stubs. This practice, however, has drawn regulatory scrutiny because of the high interest rates typically charged on the loans.
Consultation with Consumer Fraud Lawyer
If you have taken out a preseason loan with Jackson Hewitt Tax Service Inc., you should consult a consumer fraud attorney. If you would like to discuss your rights, are interested in more information on consumer fraud lawsuits, or if you have information about a possible lawsuit that you would like to share with us, please fill out the short evaluation form below and a member of Seeger Weiss LLP's experienced staff will call you to discuss your potential rights. Attorney consultations incur no obligation on your part and all initial consultations are free of charge and do not create an attorney-client relationship. Seeger Weiss LLP has office locations in both New York and New Jersey and its attorneys practice in courts throughout the country.
Link To Lawyer Seek's Jackson Hewitt Preseason Loans Content:
<a href='http://www.lawyerseek.com/Practice/Consumer-Protection-C21/Jackson-Hewitt-Pre-Season-Loans-P157/'>Jackson Hewitt Preseason Loans: Lawyer Seek</a> |
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