Banner: Maryland Attorney General J. Joseph Curran, Jr.
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For Immediate Release
April 24, 2003
Contact: Sean Caine, 410-576-6357

Tax Preparation Firm Agrees to Reimburse Consumers
for "Peace of Mind" Guarantee

Attorney General J. Joseph Curran, Jr. announced today that in an Assurance with his Consumer Protection Division and the offices of 41 other jurisdictions, H&R Block Services, Inc., has agreed to ensure that consumers are not charged for the tax-preparation company's "Peace of Mind" guarantee without their express authorization. H&R Block also agreed to establish a fund to reimburse clients who paid for the guarantee but may not have wanted to purchase the optional service.

The agreement, reached by H&R Block and the attorneys general of 41 states and the District of Columbia, concerns the company's sale of its "Peace of Mind" guarantee, under which it will pay up to $5,000 of any additional income tax owed due to a preparer's error.

"This settlement will provide restitution to customers who were charged for the Peace of Mind guarantee but who do not believe they were adequately informed of their choice," Attorney General Curran said. "The agreement will also prevent this problem from arising in the future."

The attorneys general alleged that in the 2001 tax season Block added a fee of $22 for the guarantee to all consumer tax return preparation invoices without first obtaining the consumer's affirmative acceptance. Once their investigation began, the attorneys general said, Block changed its practices for the 2002 tax season. Block denies that it violated any consumer protection statute and maintains that it did not deprive its customers of the choice.

The agreement calls on H&R Block to establish a fund of $1 million to be used to pay refunds to eligible consumers who had a tax return prepared at an H&R Block office in tax season 2001.

Under the terms of the settlement, H&R Block will seek a consumer's affirmative agreement before charging for the guarantee in the future. The company many not make a representation that it "recommends" purchasing the guarantee until the customer has been provided the material terms and conditions of the guarantee.
H&R Block also agreed to reimburse the states for the cost of their investigation.

Consumers are eligible for restitution if they had a tax return prepared in the 2001 tax season, were charged for the guarantee as an additional component, never used the guarantee and believe they were never informed that the guarantee was added for a fee to their tax preparation service, Curran said.

Eligible consumers must make a refund request by calling toll-free 866-522-7083 or visiting the website H&R Block has created for customer refund requests: (English) or (Spanish). They must make their application for refund within 120 days of the date of the agreement between the states and H&R Block.



Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372
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