Virginia Attorney General Jay Jones has issued a notice to residents about their rights concerning tax refund anticipation loans as tax season begins. These loans are offered in advance of federal or state income tax refunds and are secured by the expected refund amount.
“In these challenging economic times, many Virginians may be tempted by offers of tax refund anticipation loans,” said Attorney General Jones. “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.”
State law mandates that anyone applying for a tax refund anticipation loan must receive a disclosure before completing the application. This disclosure should include details such as the fee schedule for the loan, clarification that it is a loan rather than an actual tax refund, and information on alternative options like filing electronically without taking out a loan. The average time to receive a refund, statements clarifying that the IRS does not guarantee payment of the full anticipated amount or specific timing, repayment obligations if refunds are incomplete or denied, estimated disbursement timeframes for funds, and any applicable fees if the loan is not approved must also be provided.
Before finalizing any transaction, applicants must be given information on total estimated fees, annual percentage rates, and comparisons of costs between different methods of receiving refunds.
Virginia law prohibits making customers take out a loan simply to complete their tax return. Borrowers also have the right to rescind such loans by returning funds by close of business on the next working day.
The Attorney General’s office supports civil rights enforcement and victim assistance programs while providing legal counsel to state agencies and promoting public safety across Virginia. More information about consumer protection resources can be found on its official website.
Residents with questions or concerns regarding consumer matters can contact Attorney General Jones’ Consumer Protection Section by phone at (800)552-9963 or email at consumer@oag.state.va.us. Online complaint forms are also available.
