New Report on Refund Anticipation Loans (RALs)
Posted by on February 2, 2009
CONSUMERS URGED TO KEEP MORE OF THEIR TAX REFUNDS BY AVOIDING QUICKIE LOANS
Nearly 9 Million Refund Anticipation Loans Made in 2007; Paystub RAL Lending Returns
BOSTON – Some of America’s most cash-strapped taxpayers – those from low- and moderate-income families – spent about $900 million in the latest year recorded for what is almost always an unnecessary product: the so-called “refund anticipation loan” at income tax time.
With the opening of another tax season, consumer advocates at the National Consumer Law Center (NCLC) and Consumer Federation of America (CFA) are warning taxpayers to steer clear of refund anticipation loans (RALs), one of the most avoidable tax-time expenses. New figures reveal that RALs drained the refunds of 8.67 million American taxpayers in 2007, costing them $833 million in loan fees, plus over $68 million in other fees. In addition, another 11.2 million taxpayers spent $336 million on related financial products to receive their refunds.
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