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April 24, 2003

H&R Block to Reimburse Certain Customers

Tax preparation firm agrees to reimburse consumers
for "Peace of Mind" guarantee

DES MOINES. Attorney General Tom Miller said today that H&R Block Services Inc. has agreed to establish a fund to reimburse clients who paid for the tax-preparation company's "Peace of Mind" guarantee in 2001 -- but who may not have known they were paying for the guarantee. "We believe some consumers didn't know they were purchasing this optional service," Miller said.

H&R Block's "Peace of Mind" program promised to pay up to $5,000 of any additional income tax owed due to a tax-preparer's error. State attorneys general said Block added a fee of $22 for the guarantee and in many cases failed to first obtain consumers' affirmative acceptance.

Under an agreement between H&R Block and 41 states plus the District of Columbia, Block is establishing a fund of $1 million to be used for refunds to eligible consumers who had a tax return prepared in an H&R Block office in tax season 2001 (for taxes due for the year 2000.)

"The agreement will provide refunds for customers who were charged for the Peace of Mind guarantee but who don't think they were adequately informed it was optional," Miller said. "The agreement also requires H&R Block to avoid this problem in the future."

Block denies that it violated any consumer protection statute and maintains that it did not deprive its customers of the choice. It says about a fifth of H&R Block customers purchased the "Peace of Mind" program during tax season 2001. The states' allegations were limited to that tax season, and not for tax seasons 2002 and 2003.

Under the terms of the settlement H&R Block will seek a consumer's affirmative agreement before charging for the guarantee in the future. The company may not make a representation that it "recommends" purchasing the guarantee until the customer has been provided the material terms and conditions of the guarantee.

H&R Block also agreed to reimburse the states for the cost of bringing the action against the company.

Information for Consumers for Requesting Refunds

Miller suggested several tips for Iowa consumers and advised them to go to web sites or call a toll-free number. English web site: Spanish web site: The toll-free number is 800-472-5625. A link to the dedicated site also will be available through H&R Block's main site,

Consumers can check their tax-preparation bill for the 2001 tax filing season to see if they paid for the Peace of Mind guarantee. If they don't have the bill, they could call their tax preparer or go ahead and file a claim for refund.

There are three criteria for refund: consumers purchased the Peace of Mind program between Jan. 1 and Oct. 31, 2001; they have not submitted a claim and received payment under the program for additional tax; and they were not informed that Peace of Mind was added for a fee.

The dedicated secure web site has a simple claim-filing form to complete online.

Consumers have until August 22, 2003, to make an application for refund.

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