RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced on Friday that a temporary restraining order has been granted against a Charlotte-area tax preparation company that allegedly engaged in multiple tax violations.
The Wake County Superior Court agreed to a request by Cooper for a temporary restraining order against Instant Tax Service and Eden Kidane, the company's owner, on Thursday. Cooper filed a lawsuit on Tuesday against Instant Tax Service and Kidane. The defendants allegedly failed to disclose fees for refund anticipation loans, charged excessive fees, filed inaccurate returns and filed taxes for consumers without their permission.
"Filing someone's taxes without their permission is not only wrong but it's against the law," Cooper said. "Consumers who step up to complain help us move quickly to stop these kinds of deceptive practices."
Cooper's lawsuit asks the court to permanently ban the company from offering illegal services for tax preparation and refunds for anticipation and instant loans, as well as other refunds for consumers.
Instant Tax Service allegedly ran television and radio advertisements in the Charlotte area in December offering loans of up to $1,000. The ads stated that consumers simply needed a recent pay stub to apply for the instant loans. Consumers who went to Instant Tax Service received loans for $50 or $100 but did not give permission for their taxes to be filed. Consumers later discovered that Instant Tax Service had allegedly filed tax returns based on the information from the consumers' pay stubs.
Consumers who did give Instant Tax Service permission to file their tax returns complained that the company did not disclose its fees. The company allegedly charged fees of $700 to $800 for simple returns that would have cost approximately $200 if done by other national tax preparers. Consumers were also allegedly promised funds for refund anticipation loans within 24 to 48 hours but didn't get them quickly or at all.
Cooper's office received complaints that the representatives at Instant Tax Service locations would not answer telephones and make consumers stand outside of the office for hours without answering refund questions. Consumers who did receive refund checks from the company alleged that the checks were returned for insufficient funds.
Cooper's Consumer Protection Division received six written complaints about the Charlotte-area Instant Tax Service locations and received 130 phone complaints. The Better Business Bureau also forwarded 22 complaints to Cooper's office. Kidane disclosed in an affidavit that she received more than 500 complaints about her business's locations during the tax season.
"Many families are stretched thin and their refund checks can't come fast enough," Cooper said. "I urge consumers to think twice before you opt for an 'instant' or 'rapid' refund that may take a big bite out of your actual refund."