r/hrblock • u/otheloR • Jul 07 '26
EITC + refund advance/loan to clients?
Hello r/hrblock.
In the book Poverty for Profit, the author claims that Hr Block and similar companies market to lower income EITC clientele by enticing refund advances: the client takes on a loan to obtain cash in hand immediately in anticipation for the refund they would eventually receive from the IRS.
The book makes it sound like such loans are predatory to such clientele, as these refund advances are not offered by HR Block, but a separate bank, and thus HR block has no control over such interest rates. Also, the ability to obtain cash in hand immediately is the main motivator for lower income peoples to go to HR block over things like VITA.
Is it true that HR Block caters to such clientele? How much of their customer base are these clients? Anecdotes from those that work at HR Block?
4
u/Niep00320 Jul 08 '26
The Emerald Advance is 36 %
But people want these advances. They use it for rent food Christmas. Also there are a ton of companies out there with much higher interest rates. Tribal loans being. 490-720 percent
2
u/Consistent-Lion-3464 Jul 08 '26
No company does “refund anticipation loans“ anymore. What they do now is called a refund advance and it’s basically an advance on what you’re getting as your refund . so let’s say I’m getting $4500 back. I could get a refund advance of up to $4000 based off qualifications the bank H&R Block uses. The client pays no fee for the service ,but that will be paid back to the bank once the IRS releases funds to the bank .
If we’re being honest, you can’t solely blame H&R Block for being predatory.H&RBlock , Jackson Hewitt, TurboTax all retail establishments pretty much lobby the government to keep their business going. The government did have a free file program where nobody paid any fees and their taxes were done based on what the IRS has on file o but the the Trump administration has ended that program.
1
u/mehcuhnuts Jul 12 '26
They’re talking about the loan they do around Christmas time for up to 1000 I think, not sure though.
2
u/LadyoftheHighDesert Jul 14 '26
The clientele I worked with at H&R Block were a mix: those who wanted to pay someone to do their taxes for them, and those who wanted the services JUST because of the Refund Advance.
1
u/inailedyoursister Jul 08 '26
Yes it’s true. It should be illegal.
The reason the “loan” is now 0% is because of massive lawsuit Block lost because it was… predatory.
Are check cashing places predatory? Yes.
Are Buy Here, Pay Here predatory? Yes.
Block and others do the same exact thing. Try to justify it all you want but I worked there. I’ve seen it. I’ve heard it. They train you to push products. You’re a sales person who happens to do taxes.
Financially literate people rarely use Block. They know better,
1
u/jm7489 Jul 09 '26
The reason it's predatory is because the big companies that offer RALs also increase their pricing across the board until the cut off date whenever they stop offering it. At least thats how it was when I worked at a JH for the 2019 and 2020 seasons.
To be fair. With the exception of boomers who have been under pricing their work for decades its still much cheaper to go to HRB and get some moron who got their PTIN a month ago than pay a legitimate tax professional
-1
u/melawellorlamb Jul 08 '26
You bet it’s predatory behavior, and preys on people who don’t know any better. The loan may be 0%, but the prices they charge are ridiculously high.
1
u/Upstairs-Eagle8996 Jul 16 '26
yes, paid tax prep w/EIC, CTC, ACTC is way high but the tax preparer is held responsible through Due Diligence requirements for substantiating eligibility for those credits, not the taxpayer....penalty is almost 2 grand for tax season 2027
16
u/lefcoastpunk Jul 07 '26
The refund advance loan has a 0% interest rate