Most sued and former executive of HSBC and CEO of predatory lender Household International William F. Aldinger III once boasted that his company ‘invented tax refund loans’ - and they are proud of it. Household, and later HSBC, partnered with H&R Block. H&R Block CEO Mark Ernst appeared eager to turn the page on a flurry of disappointing corporate news. Speaking at the firm’s annual shareholders meeting in Kansas City this week, the head of the nation’s largest tax preparer outlined a fee-reduction plan that implicitly responded to critics who have charged that refund-anticipation loans unfairly siphon high interest charges from millions of low-income Americans.
Unmentioned is HSBC, a bank eager to make millions from Americans. Headquartered in London HSBC takes a percentage, if not all, of tax credits earmarked for low income Americans. HSBC takes a portion of the earned income credit and child care credit, to which they have no right. Unknown to many is the fact that HSBC checks for unpaid debts and late payments to HSBC, their merchant partners, and subsidiaries. While these predators have a legal right to their money they have no right to collect it through tax refund loans. The American Internal Revenue Service is not a bill collector for HSBC.
Each year, an estimated 10 million Americans, frustrated by weeks-long waits for their IRS refunds, turn to tax preparers who provide checks within days. Those checks are usually refund-anticipation loans, payments that are secured by and repaid from a pending federal tax refund.
The loans often run for seven to 14 days — the interval between the date they are issued and the date the lender receives the IRS payment that satisfies the debt. Because the loans are short term, the annualized interest rates often soar to 100% or higher.
More than half of those who received the loans in 2004, or more than 5 million taxpayers, were recipients of the earned income tax credit, a major federal anti-poverty program, IRS data show.
They paid an estimated $1.24 billion in refund-anticipation loan fees for 2004, the most recent year for which the data are available, according to a January report by the National Consumer Law Center, a non-profit that focuses on issues that affect low-income Americans.
They often don’t realize that they’re borrowing their own money at high rates — or realize that they’re signing up for a loan at all.
After all is said and done William F. Aldinger, John Bond, Stephen Green and HSBC are proud of what they’ve done. Intelligent people, however, see this predator as a greedy opportunistic entity following the lead of William Aldinger as they continue to take food from the mouths of poverty stricken Americans to make a dime for themselves. HSBC hired Aldinger after HSBC purchased scandal plagued Household International, paying Aldinger approximately $36 million (USD) for three years of ‘work’.
Related posts:
