Oregon Department of Justice

Attorney General Hardy Myers today filed a $2.3 million, multi-state agreement with the nation's largest tax return preparation service concerning unauthorized optional service charges that appeared on thousands of consumers' bills during the 2001 tax preparation season. Named in an Assurance of Voluntary Compliance filed today in Marion County Circuit Court is H & R Block Services, Inc. of Kansas City, Missouri.

The Oregon Department of Justice investigated allegations that H & R Block billed $22 for an optional service called "Peace of Mind (POM)" that consumers had purchased without knowing it was optional. The service protects customers for up to $5,000 of additional taxes levied by the taxing authority based upon errors made by the company's tax preparers.

"Oregon taxpayers who paid H & R Block for tax preparation services that included an optional protection fee will get money back but it will be from their tax preparer and not the government," Myers said.

Under the agreement, H & R Block will provide up to $1 million for refunds to eligible customers who had a tax return prepared at an H & R Block office in the 2001 tax season. Oregon consumers have 120 days to apply for a refund by calling the toll-free number 1-866-522-7083 or through a dedicated website in English at http://www.hrblock.com/customer_support/pom.jsp and in Spanish at http://www.hrblock.com/customer_support/pom_es.jsp.

Oregonians eligible for the refunds can expect to receive checks 45 days after the end of the 120-day refund application period. If the number of refund requests exceeds the ability to provide a full refund, a pro-rata refund amount will be established and sent to eligible consumers.

Any funds not distributed from the $1 million fund will be used by the states to establish a consumer education program regarding income tax-related issues. A committee of representatives from the multi-state group will be formed to develop the consumer education program.

The terms of the assurance also includes the following:

• H & R Block must obtain a consumer's affirmative agreement before charging for POM.
• H & R Block may not make a representation either orally or in writing or in a presentation on a computer screen that it "recommends" purchasing POM.
• The initial offer of POM must include material terms and conditions of the POM guarantee program displayed on the computer screen during the preparation of the consumer's tax return. The terms must be orally reviewed with the consumer and include a clear and conspicuous statement that the consumer has seven (7) days in which to cancel POM and receive a full refund. Customers also will receive the information about POM in writing, signed and dated by both parties. Invoices or bills, either printed or on computer screens, must separately list the itemized cost for POM.

The Oregon Department of Justice will receive $50,000 for costs and fees associated with the settlement.

Consumers wanting more information about consumer protection in Oregon may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.