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April 24, 2003
H & R Block Agrees to Refund 'Peace of Mind' Guarantee Cost

Seattle - April 24, 2003 - H&R Block, one of the nation's largest tax preparation firms, has agreed to provide $22 refunds to consumers who unknowingly paid for the company's "Peace of Mind" guarantee as part of the cost of having their 2000 tax returns prepared.

An investigation by Attorneys General from 41states showed the company automatically added the charge to consumers' tax preparation bills without first asking consumers if they wanted the guarantee.

Under the "Peace of Mind" guarantee, the company will pay up to $5,000 in additional taxes owed by a consumer if those taxes are the result of a tax preparer's error. In addition, the company agrees to have one of its representatives accompany taxpayers to any meeting with authorities.

"H&R Block was loading extra charges onto the bill of customers for services they weren't told about and had not accepted," Washington Attorney General Christine Gregoire said. "It was an unfair practice that increased the costs for thousands of consumers at tax time."

Under the settlement filed today in Thurston County Superior Court, H&R Block will pay the states a total of $2.3 million in costs and fees, $1 million of which will go into a pool to pay consumer refunds. Washington also will receive $50,000 to cover costs of the state's investigation.

Consumers eligible for the refunds are those whose tax returns were prepared during the 2001 tax season and who unknowingly paid for the guarantee but never used it.

Eligible consumers have 120 days from today to file for the refunds through a toll-free number or websites established by H&R Block. Consumers may visit (English) or (Spanish).

Although the number of eligible Washington consumers is unknown, nearly 5,000 purchased the guarantee.

Any money remaining from the $1 million refund pool will be used to establish consumer education programs related to income tax related issues.

Other terms of the settlement include:

  • H&R Block must get a consumer's consent before charging for the Peace of Mind guarantee.
  • The company cannot say it "recommends" that consumers purchase the guarantee.
  • The company shall clearly state that consumers who purchase the guarantee have seven days to change their minds and receive a full refund.
  • The company will give consumers who buy the guarantee a written copy of the program's terms and conditions.
  • H&R Block will clearly itemize the Peace of Mind Guarantee purchase on any invoice or bill.


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