Illinois Attorney General Lisa Madigan is sounding the alarm about the high cost of tax-refund anticipation services. Madigan says her office is monitoring businesses that offer tax-refund anticipation loans as the deadline for filing annual tax returns nears. “With tax season in full swing, tax preparers are once again flooding the airwaves with ads promising you a faster refund if you buy one of these loan offerings,” Madigan said. “But don’t be fooled. The only ones getting fast cash are the lenders that advertise these refund products thanks to the exorbitant fees they charge taxpayers.”
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The tax-refund anticipation loans are riddled with fees, according to Madigan. A new law is supposed to limit interest rates on loans from non-bank lenders to ensure consumers aren’t charged junk fees.
State and federal tax-refunds are often turned around quickly if an individual opts to file electronically and elects direct deposit over a traditional check.