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Consumer Protection : Advice from The Bucks County Consumer Advocates

February 2006

Q. I have has seen all these commercials for an instant tax refund. So many companies are claiming that you can get your refund without the traditional waiting period. I am not in a hurry for my refund but the thought of getting it quickly appeals to me. Are these refunds all they are cracked up to be? L.H., Buckingham

A. From a strictly financial point of view these offers cost consumers additional monies and are not usually a good deal. Consumers should always evaluate such offers and look for the fine print disclosures. Many professional tax services do offer some form of an instant tax refund. Most refunds of this type are actually loans that are called Refund Anticipation Loans (RALs). The loan is based upon your expected refund minus any fees, interest rates or charges that are assessed on it. If you agree to the terms, the tax service provider has the refund check sent directly to them and it is usually used as the loan payment. Remember, these are loans and have interest rates attached to them that vary from reasonable to predatory. When signing an agreement like this keep in mind that you are obligated to repay the loan even if your refund is less than expected or if the refund is disallowed by the IRS. If you have worked hard all year and expect a refund we suggest you be patient and wait for your check. There is no reason to share your return with anyone. Many consumers are now filing themselves, using the IRS electronic filing system. It is not as difficult as one may think and you can choose to have your refund electronically deposited in your bank account.

Q. My wife and I were watching television one evening when we both smelled something burning. We found the smell coming from our fuse box. Since it was so late at night we were afraid we would not find an electrician to come to our home. We were able to find one that came out to the house on an emergency call and gave us a quote to do the repairs. The price was very high; we wanted to think about it. The electrician turned off everything in the fuse box and told us it was safe to wait until the next morning. We worried through the night that our food would spoil so we ended up calling the electrician back first thing in the morning to do the repairs. Later on I found out that the same job could be done for $2500.00 cheaper that what I paid. I called the company and they’re not willing to refund any of our money. Is there anything that can be done? Y.S., Ivyland

A. The company provided several pieces of documentation to Bucks County Consumer Protection. One was a checklist that shows your initials next to several statements. One of the statements reads that you are aware of the charges and that you approve. Another statement says that you understand the work that needed to be done and that you agreed to the diagnosis. This also has your initials. Given this proof, we were unable to resolve your case. If a consumer finds him or herself in the same predicament as this consumer and is also able to secure their home, they may want to think about getting a second opinion on the cost of the job. It could save you hundreds or maybe even thousand of dollars. Consumers should also be very careful what they sign; a business will hold them to it.