Attorneys: H&R Block customers misled

Kansas City tax preparer denies accusations about class-action rights

? Tax preparer H&R Block Inc. has tried to encourage thousands of customers to unwittingly sign away their right to participate in a class-action lawsuit over the company’s use of refund anticipation loans, plaintiffs’ attorneys said this week.

In documents filed Thursday with the U.S. District Court of Northern Illinois, the lawyers said H&R Block has included language in more recent applications for the refund loans to say customers agree to resolve all disagreements in arbitration, as opposed to court.

They added that the applications don’t inform customers of the class-action lawsuit, although some applications mention other lawsuits that the company recently settled.

In particular, the attorneys are concerned about customers who first accepted refund anticipation loans between 1987 and 1996 – the period the class covers – but who obtained another loan in 2000, 2001, 2002 or 2005.

Molly Jenner, an H&R Block attorney, acknowledged in a memo to plaintiff’s lawyers included with the filing that the new contracts affected more than 777,000 customers who fit that description.

“By providing this information,” Jenner wrote, “defendants are in no way waiving their position, which has been affirmed by the court twice in this matter, that these arbitration provisions are enforceable and are enforceable retroactively.”

Attorneys for the plaintiffs, who argue the language doesn’t prevent customers from suing, are asking U.S. District Judge Elaine Bucklo to order H&R Block to mail notices to all 777,000 customers telling them about the class action and their rights. They also want H&R Block to post similar notices in their retail offices and change the language on the applications to also mention the litigation.

“Defendants have had, and continue to have, improper communications with members of the class each time a class member enters a Block tax preparation office and is shown a (refund anticipation loan) application,” the attorneys wrote.

Linda McDougall, a spokeswoman for Kansas City, Mo.-based H&R Block, said the arbitration language was a standard part of the loan applications and was always discussed with customers. She said it was the plaintiff attorneys’ responsibility to inform their clients about their rights.

“What they’re trying to do is shift the burden and cost of the notice from them to us,” McDougall said.

H&R Block last week agreed to pay $62.5 million to settle four similar class-action suits filed in West Virginia, Ohio, Alabama and Maryland, as well as resolve claims pending in 22 other states and the District of Columbia.

H&R Block said the settlement would cover more than 8 million customers who obtained such loans between 1989 and 2005. Shares of H&R Block closed up 15 cents at $24.55 in trading Friday on the New York Stock Exchange.