These outlets had posters promoting the “Tax Xpress Loan,” which is actually the Buckeye Title loan, available to any consumer who has registration to a vehicle. The poster stated that returns were prepared using eTax Partners software. A clerk at a CheckSmart store explained that refunds are delivered in seven to fourteen days if loaded onto the Insight prepaid card, a requirement if the title loan was extended.
The Insight Card offered by CheckSmart is issued by Urban Trust Bank
Insight Card Services promoted its Tax Solutions for retailers as “lucrative opportunities for you to increase revenues, while providing your customers the most options available at tax time.” The Tax Solution website claimed that users would generate additional revenue, compete head-to-head with large national chains, deliver more value with flexible, innovative products, and need not charge “upfront fees” for tax preparation. The Insight Card appears costly, with a $9.95 issuance fee, a fee of $1 or $2 for PIN debit card purchases, and a” Convenience Transfer Fee” of $3.50 per $ for account to account transfers. This last fee could potentially apply to title loans from CheckSmart, and thus would mean $140 in fees to transfer loan proceeds of $1,000. Advocates have alleged that the “Convenience Transfer Fee” is actually a disguised loan fee.
The employee referred to these fees as fees for the loan, but she wasn’t too clear on the details
RepubliCash, a chain of check cashers/payday lenders in Maine, advertises a “same day cash” tax refund up to $1,000. During a phone call to the RepubliCash Portland store, a clerk explained that the loan is made by the payday lender, not a separate RAL bank, and that the loan is repaid when the taxpayer’s refund check is printed at the store. A $1,000 loan would cost $70, according to the clerk.
Subsequently, we sent a tester to the RepubliCash store in Windham, Maine. The RepubliCash employee stated that the fee was $99 to prepare “basic taxes” and there was another $19 fee for each additional form. RepubliCash apparently uses the Drake software program and they do the taxes in the store at a computer. The employee stated that it cost $10 for customers to select direct deposit for their refund and $30 for the refund to be deposited on a check ($20 for the federal refund, $10 for the state refund for a combined $30). RepubliCash also offers a prepaid card called an “ICE” card, costing $4.95.
According the employee, RepubliCash prints the refund check (probably a RAC check) at the store, and that is the store’s form of security. The employee stated that RepubliCash has different guidelines for whether borrowers can get a loan or not, and the amount of the loan is dependent on the store. Generally, the Windham store will lend up to half of the total refund amount (up to $1,000). The employee also mentioned that the store would usually not give a loan if there was no earned income, because these taxpayers typically rely on claiming dependent children for the bulk of the refund; if a family is split, the employee stated it could be contentious over who actually is eligible to claim the dependent. The tester asked if RepubliCash’s tax loan was similar to its payday loan, and the employee said yes.
TRS Refund Services is once again advertising its TaxMax program to auto dealers and retailers, promoting tax preparation and refunds as a way to bolster purchases for autos and big-ticket items. The auto dealer earns up to $99 for preparing tax returns for customers, which is in addition to the tax preparation fee paid by the consumer. TaxMax also offers a pre-tax season program, in which auto dealers can offer an estimate of the consumer’s 2011 tax refund, negotiate the future down payment on a car when the consumer’s W-2 and 1099 forms arrive, and require buyers to sign a promissory note. The $139 tax refund service fees are deducted directly from the client’s refund check. One selling point for auto dealers is that the refund can be used to pay past debts owed to the dealer. The TRS FAQs note that the tax refund check will be made payable to the taxpayer but the check will be sent to the dealership. The customer just needs to endorse the check over to the dealership for the refund to be used to buy a car or pay past due debt. The FAQs also note that “when sent electronically, the funds are sent directly to the dealer’s account.” While the TaxMax website still promotes RALs, www.onedayloan.net/payday-loans-nj/ a phone call to TRS Tax Refund Services revealed the loans are no longer available.