Tax Refund Alert and Warning About Fraudsters

Its tax time and that means payday for many American workers expecting a tax refund. After a tough economic year, many cash-strapped taxpayers may be feeling a bit desperate and don’t want to wait longer than necessary to get their money. Unfortunately, this could drive consumers struggling to make ends meet to seek a refund anticipation loan.

Getting your tax refund quickly using a rapid refund loan has gotten harder for the second straight year. That may frustrate the customers who are turned down for these expensive short-term loans. But consumer advocates say its good news.

The number of refund anticipation loans available this tax season shrank after a major tax preparer was unable to find a suitable lender to back some of its loans. That loss will combine with tighter credit standards to limit how many people can get refund loans, which provide money to individuals in one or two days. Some see this as positive development because the loans are expensive and sold mostly to low- and moderate-income taxpayers who least can afford them.
''They're a complete rip-off,'' said Alan Strauss, a tax attorney and CPA in New York. ''Its like legalized loan sharking.''

Police say that fraudsters have contacted a number people by phone and told them they have paid excess tax and are eligible for a refund. The caller is then asked to provide their bank account details so that the refund can be deposited into it. Police are urging people never to give personal or financial details to unsolicited contacts.

“We advise members of the public who receive any such calls to never give financial details out over the phone without confirming that the caller is genuine”.
“We are treating these incidents as fraud and potential fraud.”

Anyone who is contacted about a council tax refund is advised not to release any details and to report the incident to police and the relevant council.