Judge Rejects H&R; Block Settlement Plan

A federal judge in Illinois has rejected a proposed $25-million settlement in a class-action lawsuit that accuses H&R; Block and a lender of being unfair to customers who got tax refund anticipation loans. U.S. District Judge James Zagel said in his 25-page opinion, however, that he would reconsider if the settlement were redrawn to make sure that eligible loan customers got all of the $25 million. Under the rejected settlement proposal, any portion of the $25 million left after all claims were in would have reverted to Block and its co-defendant, Beneficial National Bank. “The total $25-million recovery is adequate as long as that is the true recovery,” Zagel said. “I decline to approve the settlement in its current form,” he said. “If the parties can agree on a settlement that distributes the entire $25 million to claimants, I will reconsider.” Electronic filing procedures can get tax-preparation customers their refunds in as little as two weeks. Refund anticipation loans provide the customers with their money in a few days for a fee. Block and Beneficial have been fighting class-action lawsuits over refund anticipation loans for a decade.