More cash-strapped Americans turn to tax refund advances
WASHINGTON (AP) — New data show that cash-strapped Americans anxious for tax refunds are increasingly turning to payment advances and prepaid cards when getting tax preparation help. That's raising concerns among regulators about whether consumers are fully informed about the fees.
"Refund anticipation checks" are especially popular among low-income families who receive the Earned Income Tax Credit. The advances are marketed as a way to get refunds faster or to defer payment of tax preparation costs.
The Consumer Financial Protection Bureau says some consumers have complained.
The bureau is finalizing the first rules on prepaid debit cards, including those for tax refunds, that would require "easy to understand" disclosures upfront about costs and risks.
IRS data show that refund anticipation checks have risen to 21.6 million, up 17 percent from 2011.