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Tax Firm Settles Suit By Gilbert Chan Jan. 8, 2007 (The Sacramento Bee, Calif.) Jackson Hewitt Inc. has agreed to refund California customers $4 million to settle a state lawsuit accusing the nation's No. 2 tax preparation company of illegally marketing a high-cost tax refund loan program, Attorney General Bill Lockyer announced Wednesday. Lockyer said Jackson Hewitt pressured mostly low-income customers to take out expensive loans rather than encourage them to wait a few weeks to receive their federal income tax refunds for free. More than 200,000 loans and other financial products were sold from 2001 to 2004. The lawsuit said some customers paid fees equivalent to an annual interest rate of more than 200 percent. "They deceived consumers and took money from low-income families who can least afford it," Lockyer said in a statement. Jackson Hewitt officials did not return calls for comment. Under the settlement, consumers can receive up to $30 per loan and $15 for each additional financial product purchased from 2001 to 2004. Jackson Hewitt also will pay $1 million in civil penalties and fees to cover the state probe. |
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