H&R Block Inc. has agreed to refund as much as $19.4 million in fees paid by customers nationwide for individual retirement accounts as part of the settlement of a suit alleging the accounts were virtually guaranteed to lose money, according to New York Attorney General Andrew Cuomo.
H&R Block, the largest U.S. tax preparer, also will pay $750,000 in fines, fees and costs to New York, Cuomo said Monday.
The settlement stems from a case filed in 2006 by then-New York Attorney General Eliot Spitzer, alleging that H&R Block encouraged clients to put their tax refunds into Express IRAs whose fees exceeded earnings. Cuomo, who took over the case, said that H&R Block had opened more than 600,000 Express IRA accounts for tax preparation customers since 2000 and that 85% of these paid more in fees than they earned in interest.
"H&R Block's aggressive peddling of fee-laden retirement accounts that were virtually guaranteed to lose money needlessly cost families across the country millions of their hard-earned dollars," Cuomo said.
H&R Block, of Kansas City, Mo., did not immediately respond to a call for comment.