Kansas City, Mo A Texas judge said he would order H&R Block to repay $75 million for committing a "clear and serious violation of duty" by receiving undisclosed fees for loans to clients who expected tax refunds.
Judge J. Manuel Banales in Kleberg County announced his planned pretrial ruling in the class-action lawsuit by way of a letter to attorneys. The suit is one of several Block faces over the "refund anticipation loans."
The judge wrote that Block should have disclosed the fees because it had a fiduciary duty to its customers, meaning it is supposed to look out for their financial best interests. Block committed a "clear and serious violation of duty," Banales wrote, adding that the conduct was "intentional, willful and deliberate."
Block denied that it owed a fiduciary duty to tax customers.
"The company is shocked and outraged at this ruling," Block chairman and chief executive officer Mark A. Ernst said during a conference call to explain the planned ruling to investors. "We are now evaluating all of our options, including an immediate appeal. We believe that this ruling violates Texas law."
The loans are made " for a steep fee " to taxpayers who expect a refund.