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Oh Eliot…
By JLP | May 9, 2006
must you act like a bully all the time? The more I read about Eliot Spitzer, the more I dislike him. He’s still going after H&R Block and their IRA account program. I wrote about this before.
The problem with the H&R Block IRA is not the fees but the fact that people don’t put enough money into the account. If you put a small enough amount into the account, it WILL be eaten alive by fees. NOTHING is free in life. Eliot, you should know that.
What I can’t figure out is why he doesn’t go after teachers’ unions and their cozy relationships with annuity providers that HURT teachers? We all know why. It is because Eliot is a Democrat and he his running for governor of New York. He NEEDS the teachers’ unions on his side. Forget about the actual teachers, they aren’t important to him.
I hate politics.
Topics: IRAs | 15 Comments »
May 9th, 2006 at 9:26 am
That’s exactly how I’ve felt about Eliot for a long time now … All business is evil to him; but don’t you mess with his future special interest financiers!
May 9th, 2006 at 10:43 am
He is evil because he is going after a business that is screwing people and not after the union.
nice logic.
regards
May 9th, 2006 at 10:47 am
In the case of H&R Block, it is debateable that they are “screwing” people. What the teachers’ unions are doing is FAR WORSE. But, Spitzer NEEDS the teachers’s unions, therefore, he will not go after them.
My logic is fine.
May 9th, 2006 at 11:49 am
This is borderline, at best. It’s part Spitzer grandstanding and part truth. The problem is that H&R Block has a fiduciary duty to its clients that it routinely disregards. They sell your tax return data, underreport your income, try to force you to take loans at usurious rates, and steer you towards retirement products that only benefit themselves. They do this with people they know are not financially literate and cannot refute what the “expert” is telling them.
It’s taking advantage of those that can’t help themselves, and that’s what I can’t stand. If Mr. Spitzer was the only one on this bandwagon it might be different. But he is far from the only AG suing H&R Block over its business practices.
May 9th, 2006 at 11:52 am
[...] JLP over at AllFinancialMatters tends to disagree. His argument is that it’s all grandstanding by Eliot Spitzer gearing up for a Gubernatorial run. I believe this specific lawsuit is probably borderline, at best. It’s part Spitzer grandstanding and part truth. H&R Block knew what it was doing and had to have known what it was doing was wrong. It’s taking advantage of those that can’t help themselves, and that’s what I can’t stand. If Mr. Spitzer was the only one on this bandwagon it might be different. But he is far from the only AG suing H&R Block over its business practices. [...]
May 9th, 2006 at 11:54 am
Kirk,
Back when I was taking the H&R Block tax class, I was talking with a lady who worked for them. She said that people INSIST on getting their money right away even though they pay through the nose to get it. She said it is a mentality-thing and NOT pushiness on H&R Block’s part.
DISCLAIMER: AllFinancialMatters has advertised for H&R Block in the past. However, when it comes to blogging about personal finance, I call them as I see them.
May 9th, 2006 at 1:00 pm
We’ll probably have to agree to disagree on this one. Part of the mentality is due to the (misleading) advertising on H&R Block’s part that doesn’t disclose that it’s a loan at 1000% APR. The advertising simply says “get your refund now”. Putting all the details in the teeny print when you know you’re taking advantage of someone doesn’t cut it and a lot of states agree. A judge threw out a $360 million settlement last year that H&R Block negotiated as inadequate to the harm done. No matter what a company says, paying $360 million in a settlement is not “not admitting guilt”.
http://theinvestimist.com/2006/02/16/hr-block-sued-again-over-refund-anticipation-loans/
May 9th, 2006 at 1:03 pm
Kirk –
Block does not sell your tax return data. In fact, you have to sign a waiver for them to even share it in house with their other divisions of Block.
They also do not underreport your income (I’m not saying there are no dishonest preparers) as a company policy. In fact, Block has a reputation for being too much of a stickler for the rules (see http://www.taxguru.net) and not being aggresive enough on behalf of their clients.
Furthermore, I can tell you from the office I work in that we do *not* push people into the banking products. We present the choices and let the people make the call. The people that do choose the products are presented with a special notice that they are taking a loan (in case they don’t realize). Most people don’t care – especially the ones early in the season who just want their money ASAP. I can tell you that I try to suggest to people that they’ll save money be avoiding the loans.
Please either get some sources for your statements or have some other means of backing them up before you accuse Block as a company of illegally preparing returns (which is what deliberately underreporting your income would be), or selling personal data, which is completely contrary to the privacy policy every client receives before we touch their personal information.
May 9th, 2006 at 1:05 pm
Kirk,
I think the H&R Block anticipation loans are a total ripoff. But, if people are too stupid to figure out for themselves that they aren’t a good deal, what are we supposed to do. I guarantee you that some people KNOW how much the loan is costing them but they don’t care.
May 9th, 2006 at 2:05 pm
I don’t think it’s criminal of H&R Block to take advantage of people’s impatience and stupidity. It’s in the fine print. They’re just too impatient to read it, too stupid to understand it, too impatient to get their money. Pure and simple. But you have to admit, they are charging usurious fees.
I’m not sure I get the annuity/teacher’s union thing. Are the teachers forced to buy the annuity? I didn’t think they were. It sounds like it’s just another offering like NYSTRs (NY State Teacher’s Retirement, similar to CALPERS) or TIAA-CREF.
May 9th, 2006 at 2:22 pm
JLP said: “But, Spitzer NEEDS the teachers’s unions, therefore, he will not go after them.”
I guess he missed this bit of news –
“ALBANY, N.Y. (AP) _ State Attorney General Eliot Spitzer canceled his speech to the state’s largest teachers’ union that endorsed his campaign for governor because he is investigating its leadership, according to a published report.” … “Spitzer is investigating the union’s practice of accepting cash from an investment company that is then allowed to try to sell retirement plans to union members.”
The whole article can be read here:
http://www.newsday.com/news/local/wire/newyork/ny-bc-ny–governorsrace-sp0507may07,0,3712741.story?coll=ny-region-apnewyork
Regards.
May 9th, 2006 at 3:08 pm
SB,
Interesting…
May 9th, 2006 at 3:18 pm
Pat,
The underreporting of income comes from a GAO study where 10 of 19 chain stores didn’t report side business income.
http://www.gao.gov/cgi-bin/getrpt?GAO-06-563T
The selling of tax data comes from a complaint from the California AG’s office
http://msnbc.msn.com/id/11373754/
Sharing of tax return data is not illegal if you are doing it with companies of shared ownership. So, what the California AG’s office is alleging is that it was shared with outside firms for marketing purposes.
Not all of H&R Block’s workers are bad apples. I’m saying management is and that it does corrupt the organization.
May 9th, 2006 at 5:04 pm
JLP
My problem is that we paying H&R Block for honest advice in doing taxes. They take that opportunity to rip us( the least knowledgeble among us) off with other “products”.
What if Eliot Spitzer went after unions first, then you would accuse him of being pro-business because he is not doing anything against this ripp-off.
I do agree that it is all politics and very little substance but it is better then nothing.
Regards
May 9th, 2006 at 5:44 pm
I suspect Spitzer would like to be President someday. If that is the case, then he is picking his targets wisely. I believe that if you dig hard enough with any business or organization some law, rule, or regulation is being broken somewhere.