CHARLOTTE, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced a $60,000 court order on Monday against a Charlotte-based tax preparer that allegedly filed customers' taxes without their permission and charged significant fees.
Under the terms of a consent judgment, Eden Kidane and the three Instant Tax Service branches she owns in Gastonia and Charlotte must reform their practices and pay $60,000 worth of consumer refunds, enforcement efforts and consumer education.
"Misleading consumers and then overcharging them is no way to do business," Cooper said. "We will continue to work to stop bad practices and win money back for consumers."
The judgment permanently bars Kidane and her stores from filing tax returns without the authorization of consumers or filing tax returns using a paystub as opposed to a W-2 and misleading consumers. The tax preparation locations must also disclose to consumers, in writing and orally, all service fees and must post fees where potential customers can see them. The defendants are also banned from making holiday, paystub and instant cash advance type loans and may not misrepresent the cost, timing, eligibility, amount or terms for any refund anticipation loans.
Cooper filed a lawsuit against Instant Tax Service in March after receiving 116 consumer complaints related to issues with the company's tax preparation work. His office won a temporary court order to stop the problematic practices.
Instant Tax Service ran radio and television advertisements in the Charlotte area beginning in December. The ads offered up to $1,000 loans that required only a paystub. Customers alleged that they received loans for $50 or $100 before the Instant Tax Service filed their tax returns without their permission. The tax provider allegedly charged consumers $700 to $800 in fees for work that would have cost approximately $200 when done by other national tax preparers.
Instant Tax Service representatives also allegedly failed to answer telephone calls and made consumers stand outside of their office for hours without answering questions.
"Many of us need a little help at tax time, but do your homework before you pay anyone to do your taxes," Cooper said. "People who work on your taxes will have access to your personal financial information, so check them out thoroughly."