Attorney General Jay Jones spreads awareness about Virginians’ rights regarding tax refund anticipation loans
VENN
RICHMOND, Va. (WRIC) -- Attorney General Jay Jones is spreading awareness about Virginians' rights regarding tax refund anticipation loans amid both National Consumer Protection Week and tax season.
Tax refund anticipation loans are made in anticipation of, and secured by, someone's federal or state income tax refund, the Attorney General's office said in a press release on Tuesday, March 3.
With some Virginians considering applying for or obtaining such a loan, Jones shared some protections under Virginia law to be aware of.
Among other protections, Jones' office said Virginia law requires that applicants for a tax refund anticipation loan receive a disclosure before completing the application that clearly states:
- The refund anticipation loan fee schedule
- That a refund anticipation loan is a loan and not the applicant’s actual income tax refund
- That a customer can file an income tax return electronically without applying for a refund anticipation loan
- The average amount of time it takes to receive a refund
- That the IRS does not guarantee that it will pay the full amount of the anticipated refund and does not guarantee a specific date that a refund will be made
- That the borrower must repay the loan and related fees if the tax refund is not paid or not paid in full
- The estimated time within which the loan proceeds will be disbursed, and
- The fee that will be charged, if any, if the loan is not approved.
Before completing the loan transaction, Jones' office said the applicant must be given:
- The estimated total fees for obtaining the loan
- The estimated annual percentage rate for the loan, and
- The various costs, fees and finance charges associated with getting a refund directly from the IRS, a refund anticipation loan or any other refund options from the facilitator of the refund anticipation loan.
Jones' office added that Virginia law also prohibits requiring a customer to enter into a loan arrangement to complete a tax return.
If you obtain a refund anticipation loan, Jones' office said you have the right to rescind the loan on or before the close of business on the next business day by returning the check or loan money to the lender or the loan's facilitator.
For more information about your rights regarding these loans, view the law in full here.
Virginians who have a question, concern, or complaint about a consumer matter should contact Attorney General Jones’ Consumer Protection Section:
- By phone at 800-552-9963
- By email at consumer@oag.state.va.us
- Through an online complaint form
- Through an online contact form
"In these challenging economic times, many Virginians may be tempted by offers of tax refund anticipation loans," Jones said in a press release. "It is important that consumers research and consider all information about these loans in advance, including the loan fees and the loan’s annual percentage rate."
