Malena Amusa

And the Award for Fraud Most Likely to Target Poor People…

This season we recognize loan sharks offering “rapid refunds,” high-interest-rate loans given to people awaiting their federal tax returns. They systematically target poor, minority neighborhoods, where they rake in millions of dollars in loan fees.

These tax folks gank nearly a billion dollars every year from low-income workers seeking to speed the arrival of their federal Earned Income Tax Credit. (Just imagine—the number of teachers’ salaries we’d improve with that kind of grip!)

For those curious on how this system screws the poor, here’s the recipe:

Step 1: Have poor people go to H&R Block to have their taxes prepared.

Step 2: Once there, offer them the opportunity to receive their tax return a week or two sooner, via a loan.

Step 3: Make them sign up.

Step 4: Fail to inform then that interest rates run as high as 700%.

Step 5: Watch the dollars roll in….

One activist said it right: “They [tax preparation firms] are preying on people that they know are uninformed.”
http://www.amny.com/news/local/am-refunds0129,0,2892732.story?coll=am-local-headlines

Posted at 7:09 AM, Jan 29, 2007 in News | Permalink | View Comments