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Spitzer vs. H&R Block
By JLP | March 18, 2006
Eliot Spitzer is going after H&R Block now. According to an article ($) in Thursday’s Wall Street Journal:
“The complaint cited an unnamed, 68-year-old Brooklyn, N.Y., man who, with a taxable income of $25,421, made a one-time contribution to an Express IRA of $300 in 2004. The man was charged a $15 account opening fee, a $10 account maintenance fee, and a $25 closing fee when the account was closed after 18 months. He earned just $5.18 in interest on the account, meaning his investment actually declined by 15%, Mr. Spitzer said.”
THIS is what he’s basing his case on? Although I hate fees of any kind, those fees sound reasonable to me. The problem is that the guy only invested $300! Naturally, those fees are going to eat up a small investment amount. I think what is behind this is HEADLINES! Spitzer is simply looking for free advertising. Everytime his name gets mentioned in a newstory, the fact that he is running for governor of New York is also mentioned.
Oh, and if you are interested in H&R Blocks response, click here (PDF).
Topics: Miscellaneous | 2 Comments »
March 20th, 2006 at 8:17 pm
I’m generally a fan of Spitzer and have a hard time feeling sorry for any major American corporation (due to the fact that they basically own the American govt right now and get whatever they want), but this does seem a bit excessive. The fees don’t seem all that bad, except the Acct Closure fee which is ridiculous but higher at other places. And the other point of the complaint; that funds were invested in MM accts which don’t keep up inflation is a catch-22 for H&R. If they had put people’s money into S&P funds and the S&P tanked by 10% then people would be irate that their money wasn’t invested in a “safe” MM acct.
January 2nd, 2007 at 12:40 am
I live in the Midwest and have no care about Spitzer, however; he has made some good points. Working in the financial industry I compared the fees to what is considered the industry standard for say like a mutual fund; and I found that the fees are fairly high. But when you take into account that you can go down to your local savings and loan bank and get a MM that performs just as well and pay a 1/4 of what you pay with HR Block. So in short you’re paying more than what most would for professional management and getting a RR thats below that of what you usually get with the professional management. I feel its a good thing that people are saving for retirement but Block has taken advantage of the ignorance of their client base in the form of a, misleading product and HR Block is in the wrong. Keep it up Spitzer!