The state of Illinois is seeking to shut down Chicago and East St. Louis locations of Mo' Money, a national tax return preparation service.
Illinois Attorney General Lisa Madigan, who sued the company, said it charged customers at least $800,000 in hidden costs and fees for services, while filing inaccurate tax returns without consumers’ authorization. The suit also seeks refunds to customers of at least 800,000.
“Without customers’ permission, this company filed annual tax returns riddled with errors and charged taxpayers exorbitant, undisclosed fees, but worst of all, it failed to provide consumers with their refund checks,” Madigan said. “While the promise of fast cash may be tempting, these heavily marketed refund services always end up costing taxpayers much more in the end.”
Mo' Money is based in Memphis, Tenn., and does business nationwide. Madigan said the company advertised its tax refund anticipation programs primarily to low-income taxpayers as a way to receive and spend refunds instantly. But, she says, Mo’ Money used these programs to automatically deduct hundreds of dollars in undisclosed fees before consumers ever received their refunds – as much as $700 per person.
The suit also alleges Mo’ Money filed tax returns without consumers’ authorization, which in some cases were fraught with errors. For other consumers, Mo’ Money charged fees to file Illinois state tax returns but never completed the filings on taxpayers’ behalf. Consumers have waited weeks – and many continue to wait – to receive refund checks due to these alleged deceptive practices, Madigan said.
Madigan’s office has received 76 complaints against Mo’ Money this year. Consumers have also contacted the Better Business Bureau, City of Chicago and the Chicago Police Department.
When selecting a tax preparer, consumers should avoid basing their decision on the desire for Refund Anticipation Loans (RAL). These loans carry big fees and aren't that much faster than filing a return electronically and having the refund direct deposited to a bank account.