Judge gives preliminary approval to a $39 million H&R Block settlement
KANSAS CITY, Mo. -- A federal judge has given preliminary approval to a $39 million settlement of a class-action lawsuit over H&R Block Inc.'s use of refund anticipation loans.
U.S. District Judge Elaine Bucklo this week determined the proposal was "within the range of reasonableness" and scheduled an Aug. 2 hearing to hear any objections and give the deal her final approval.
Bucklo ordered plaintiff attorneys to mail notices of the settlement to the class members and gave opponents until July 5 to mail in their objections.
H&R Block last week said it and banking partner Beneficial National Bank would split the $39 million settlement, which would cover 1.7 million customers who bought 2 million loans between April 8, 1994, and Dec. 31, 1996.
The refund loans are short-term, high-interest payments to tax clients who don't want to wait an extra few weeks for their refunds to arrive from the government.
Plaintiffs sued H&R Block in federal court in Chicago in 1998, claiming it failed to adequately explain the loans' high interest and fees.
Bucklo had rejected two previous settlement offers but also has whittled the number of plaintiffs down from the original 17 million.
H&R Block agreed in December to settle more than two dozen class-action lawsuits over the refund loans for $62.5 million. That settlement covered 8 million customers.
The company still faces a lawsuit filed in February by California Attorney General Bill Lockyer on behalf of 1.5 million state residents who have taken out refund loans since 2001.
Shares of H&R Block gained 25 cents to close at $22.88 in trading Thursday on the New York Stock Exchange, where they have traded in a 52-week range of $19.80 to $30.