Monday, January 22, 2007

Refund Anticipation Loans

Today Personal Finance Advice posted about how tax preparers have become loan sharks. It's a great article and a disturbing trend. It takes advantage of those who don't have the knowledge to manage their own money when that group is the one that needs the most help.

Anyone who has met me or has been involved in one of my forum discussions on the topic knows that I abhor payday loan companies. They're sneaky, underhanded and take advantage of people. Their rates are usury and they only get away with it because they charge "fees" instead of interest.

These Refund Anticipation Loans (RAL) seem to be the new payday loans. Lots of states have started coming down on payday loan companies and I hope these RAL companies are soon to follow. I guess it makes sense though. Face-to-face companies have started losing a lot of business because of online filing software but hopefully they'll come up with a better solution than completely screwing the consumer. I suggest you boycott companies that offer RALs and read Boston Gal's posting on how to get DIY tax preparation software for cheap. Then you can do it yourself and get your money back quickly and cheaply.