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Print This StoryInstant Tax Refunds Could Be Costly For Consumers
People Choosing Fast Cash Must Pay Heavy Interest Fee
POSTED: 12:42 p.m. EST February 24, 2003
CLEVELAND -- Some ads are promising people fast cash on their income tax refunds without the wait.
But in Monday's Consumer Alert, Troubleshooter Chris Caswell reported that choosing that option could be costly.
Instant money sounds really attractive, but what consumers don't realize is that they're actually signing up for loans.
Hundreds of thousands of Americans take advantage of cash-advance tax refunds.
It's a loan service for consumers who don't want to wait for their refunds or for those who don't have a bank account to take advantage of the Internal Revenue Service's direct deposit.
People choosing the cash-advance option may get their tax refund sooner rather than later, but they're going to pay a hefty interest fee.
"Should there be an error, should you not get that amount back, you will have to pay the loan back," said Sandy Prebil, of the Better Business Bureau. "You will have to pay interest, plus filing fees, other fees that are part of that loan. That's what it is -- a loan."
Experts said that waiting a few weeks for the IRS to process your claim could save people some money and some peace of mind.
For more tax tips and information, click here.
But in Monday's Consumer Alert, Troubleshooter Chris Caswell reported that choosing that option could be costly.
Instant money sounds really attractive, but what consumers don't realize is that they're actually signing up for loans.
Hundreds of thousands of Americans take advantage of cash-advance tax refunds.
It's a loan service for consumers who don't want to wait for their refunds or for those who don't have a bank account to take advantage of the Internal Revenue Service's direct deposit.
People choosing the cash-advance option may get their tax refund sooner rather than later, but they're going to pay a hefty interest fee.
"Should there be an error, should you not get that amount back, you will have to pay the loan back," said Sandy Prebil, of the Better Business Bureau. "You will have to pay interest, plus filing fees, other fees that are part of that loan. That's what it is -- a loan."
Experts said that waiting a few weeks for the IRS to process your claim could save people some money and some peace of mind.
For more tax tips and information, click here.
Previous Stories:
- April 9, 2002: Find Out How To Get Bigger Tax Refund
- March 15, 2002: Fast Tax Refunds May Cost More
- February 15, 2002: Woman Waits 2 Weeks For 24 Hour Tax Return
- January 3, 2002: Little-Known Tips Can Increase Your Tax Refund
- April 13, 2001: How Should Married People File Taxes?
- April 3, 2001: Contributing To IRA Helps Tax Refund Chances
- March 30, 2001: Are Rapid Tax Refunds Worth It?
- November 15, 2000: Does The IRS Owe You Money?
- February 8, 1999: Rapid Refund Over-Taxing Computers
- February 5, 1999: Rapid Refund On Tax Returns Could Cost You
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