Illinois Attorney General Lisa Madigan says consumers should steer clear of refund anticipation loans while preparing 2009 tax returns.
Some tax-preparation firms offer the loans as a way to get money quickly. Tax filers get a cash advance based on their expected tax refund instead of waiting for the refund from the government. The loans are legal.
Madigan says it’s tempting to get fast cash, especially during tough economic times. But she says the costs outweigh the benefits.
The loans can include high costs and fees, which are deducted from the consumer’s tax refunds.
The Internal Revenue Service says more than 8 million Americans used refund anticipation loans in 2007, the latest year data was available.
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