Consumer Affairs cracks down on tax preparers offering "instant" refunds
The NYC Department of Consumer Affairs has issued more than 1,000 violations in the last two weeks to law-breaking tax preparation companies - about one for every three inspected during a recent sweep.
The resulting fines - for deceptive practices such as misrepresenting qualifications, falsely advertising "instant" refunds and failing to properly disclose fees and charges - may approach $1 million, according to DCA Commissioner Jonathan Mintz.
Driving much of the problem are preparers who fail to disclose that "refund anticipation loans" carry annualized interest rates as high as 500%, said Mintz. Customers of such predatory loans -offered widely in communities with high numbers of immigrants - often are not told that they must pay back the loan with interest, even if their anticipated refund is not as large as expected, he explained.
New Yorkers making less than $57,000 a year can get free tax-filing assistance at 69 Volunteer Income Tax Assistance (VITA) sites throughout the city or file their taxes for free online at nyc.gov/taxprep. Tips on filing cheaply and safely and a VITA locator can be found at nyc.gov/dca.