H&R Block class action claims military members overcharged for tax refund advance loans

H&R Block class action lawsuit overview:

• Who: Plaintiff Joshua Montgomery has filed a class action lawsuit against HRB Tax Group Inc., H&R Block Inc., Pathward N.A. and Emerald Financial Services LLC.
• Why: Montgomery claims H&R Block overcharges military members for tax refund advance loans.
• Where: The H&R Block class action lawsuit was filed in California federal court.

A new class action lawsuit alleges H&R Block overcharges military members for tax refund advance loans, violating the Military Lending Act (MLA).

Plaintiff Joshua Montgomery claims H&R Block’s tax refund advance loans are inseparable from a “web of required ancillary financial accounts” that generate revenue despite the company’s marketing of the loans as being “no-fee” and “0% APR.”

Montgomery argues the tax refund advance loans are structured through temporary deposit accounts over which H&R Block and its banking partner exercise exclusive control.

“Although Defendants advertise the Refund Advance Loan as a ‘0% APR’ loan, the product’s structure and required ancillary services cause the MAPR to far exceed the MLA’s 36% cap for covered borrowers, including active-duty service members and their dependents,” the H&R Block class action lawsuit says.

H&R Block class action claims company violates Military Lending Act

Montgomery argues the MLA prohibits creditors from extending consumer credit to covered borrowers at a military annual percentage rate (MAPR) greater than 36%, calculated to include not only interest but also fees and charges imposed directly or indirectly as a condition of the extension of credit.

The plaintiff wants to represent a nationwide class of all covered members who entered into an agreement with H&R Block to use an emerald refund loan or a substantially similar product that the company charged a finance charge, including a refund transfer fee or check disbursement fee.

Montgomery also wants to represent a nationwide class of all covered members who entered into an agreement with H&R Block that included an arbitration agreement, a class waiver agreement, a waiver of the right to a jury trial or otherwise imposed onerous legal notice provisions in the case of a dispute.

The plaintiff demands a jury trial and requests declaratory and injunctive relief and an award of actual, statutory and punitive damages for himself and all class members.

H&R Block is currently facing another lawsuit for allegedly failing to properly secure and safeguard the sensitive information of its customers during a May 2024 data breach.

Have you been overcharged by H&R Block for a tax refund advance loan? Let us know in the comments.

The plaintiff is represented by Victor J. Sandoval and David S. Almeida of Almeida Law Group and Brandon M. Wise and Domenica M. Russo of Peiffer Wolf Carr Kane Conway & Wise LLP.

The H&R Block class action lawsuit is Montgomery v. HRB Tax Group Inc., et al., Case No. 3:26-cv-00759-LL-MSB, in the U.S. District Court for the Southern District of California.

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