Express IRA's

[Brian EA]

The latest news is that HRB has just been charged with fraud; selling Epress IRA"s

Anyone else selling this type of product.

Your thoughts

[JoshinNC]

I do IRA's

Not exactly sure what an "express IRA" is. I am a licensed securities salesperson, and assist my clients in opening Roth's, Traditionals, SEP's and SIMPLE's. Good residual income, and just one more layer of service for my clients.

What was HRB charged with and what exactly is an express IRA?

[KBTS]

Link to Article

Here is a link to an article on Yahoo describing the lawsuit.

http://biz.yahoo.com/ap/060315/h_r_block_fraud_suit.html?.v=8

[Brian EA]

New York charges H&R Block with fraud
Attorney General: Tax firm steered clients into loss-making IRAs

Nicholas Roberts / Reuters file
“Make no mistake — we believe in the Express IRA product and are proud of the opportunities it presents for our clients,” said H&R Block’s Chairman and CEO Mark A. Ernst, responding to a 250 million fraud suit filed by New York state against the tax preparer.
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Updated: 12:29 p.m. ET March 15, 2006
NEW YORK - New York state filed a $250 million fraud suit Wednesday against H&R Block Inc., the nation’s largest tax preparing service, charging the company fraudulently steered customers into a losing retirement account plan.

The news unnerved investors, who sent H&R Block shares down $1.30, or almost 6 percent, to $20.70 in midday trading on the New York Stock Exchange.

The lawsuit, filed in Manhattan’s state Supreme Court, says Block advised clients to buy an “unsuitable, fraudulently marketed, poorly performing, fee-ridden ’retirement vehicle’ called the Express IRA,” an account that actually shrinks over time.

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The court papers, filed by Attorney General Eliot Spitzer, say the money in the retirement account decreases because the only investment option offered is a money market account with an interest rate so low that it does not cover the fees — “fees that H&R Block fails to adequately disclose.”

The attorney general’s lawsuit asks that the company be required to stop engaging in any fraudulent practices, that the company be forced to disgorge profits and pay damages and restitution caused by their scheme, and that it pay civil penalties of no less than $250 million.

H&R Block said in a statement that it will “fight vigorously to defend the Express IRA product and ensure it remains available to our many clients who rely on it as a helpful savings option.”

“Make no mistake — we believe in the Express IRA product and are proud of the opportunities it presents for our clients,” said Chairman and CEO Mark A. Ernst.

Spitzer said that H&R Block opened more than half a million Express IRA accounts in the last four years. He said 85 percent of customers who opened the accounts paid H&R Block more in fees than they earned in interest. More than 150,000 customers closed their accounts, incurring additional undisclosed fees and almost $6 million in tax penalties, Spitzer said.

The investigation by the attorney general’s office was launched in 2005 after it received information from an H&R Block tax preparer.

© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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[Matt Sova]

Hrb

They have an investment company as well. They purchased Olde Discount years ago. I know that the two can tie together very well, but if HRB is putting the IRA money into HRB stock only I could see a conflict of interest there.

[CFP]

I Think This Is Great , If Your Average H&r Block Investment Advisor Gets As Much Training As Your Average H&r Block Tax Pro No Wonder They Are Getting Sued.
First Off To Encourage People With Little To No Savings Or What I Call Rainy Day Money To Fund An Ira Or Other Retirment Is Just Plain Bad Advice. So I Say Good For New York.

[Brian EA]

I Think This Is Great , If Your Average H&r Block Investment Advisor Gets As Much Training As Your Average H&r Block Tax Pro No Wonder They Are Getting Sued.
First Off To Encourage People With Little To No Savings Or What I Call Rainy Day Money To Fund An Ira Or Other Retirment Is Just Plain Bad Advice. So I Say Good For New York.

You got my vote

[Don B]

The latest news is that HRB has just been charged with fraud; selling Epress IRA"s

Anyone else selling this type of product.

Your thoughts

The cost and fees of many IRAs exceed the initial setup. Choosing a good IRA is the responsibility of the person investing. The charge that HRB's express IRA is only investing in a money market, if true, should be disclosed to the investor. In the end though, people have to accept some responsibility for their decisions. The statement that HRB is charged with fraud may be a little overboard.

Don B

[Matt Sova]

Depends

I wAs GoInG tO pOsT lIkE tHiS to be more annoying than the one where every word starts with a capitalization, but decided against it.

As far as fraud goes, yes people have to take responsibility. However, they hired an assumed professional and if they were presented with one thing and given another there could be issues. No one will know until the facts come out in court. Although they will probably settle before then and no one will know for sure.

[OldJack]

I wAs GoInG tO pOsT lIkE tHiS to be more annoying than the one where every word starts with a capitalization, but decided against it.

I cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg atfer a few dinrks at the bar wtih yu.
The phaonmneal pweor of the hmuan mind.
Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae.
The rset can be a taotl mses and you can sitll raed it wouthit a porbelm.
Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
Amzanig huh?
yaeh and I awlyas thought slpeling was ipmorantt.

[Don B]

I cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg atfer a few dinrks at the bar wtih yu.
The phaonmneal pweor of the hmuan mind.
Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae.
The rset can be a taotl mses and you can sitll raed it wouthit a porbelm.
Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
Amzanig huh?
yaeh and I awlyas thought slpeling was ipmorantt.

Thats amazing, I read your entire post without a pause, and it is not near as annoying as reading every word as proper noun.

[BP.]

Wow, Old Jack, impressive post! I'm amazed at the readability of your message. Did it take you long to compose it; you know, to make sure you included all the letters of each word?

[BOB W]

Unbelivable..................

................. I'm still laufing.............

[farm girl]

Let's get back to the Express IRA ...

I do work for HRB. That being said, you should also know that Eliot Spitzer is hoping to be govenor of NY in 2006.

The intent of the Express IRA is to get people to start putting money into an IRA, either Traditional or Roth, through their refund or through a monthly debit from a checking or savings account. The amount can be as little as $300.00 (lump sum) or $25.00 (monthly debit). The set-up fee is $15.00 and after 12 months there is a $10.00 annual maintenance fee which is waived if using the monthly debit or if the account balance is $1,000.00 or more. The client is given a booklet explaining the process, the tax preparer should have explained it as well and they sign enough forms that there should be no doubt as to the fees. The money is originally put into a money market account at what I think is currently 3% and within 2 weeks or so the client receives a packet of information from which they choose an investment that suits their needs.

I realize that there are those who think very little of HRB, but when I compare low initial investment requirement and the fee waiver - I think it's a good deal for someone starting out with their first IRA. I ask everyone who would qualify for an IRA if this is information they would be interested in and explain about the Saver's Credit if it's something that they qualify for. The choice is theirs. I feel as if I'm providing a service to someone who may not know about IRA's or may otherwise not be able to contribute to one with a higher minimum initial investment.

[Unregistered]

there are better investment options than a 4% money market

I assist my clients in opening IRA's as well. You referenced the low intial investments that are offered through the HRB product. The majority of my clients are in IRA's sponsored by American Funds, and only need to make a minimum investment of $50. With American Funds they have a very broad range of funds from which to choose, including money markets, growth and income funds and speculative investments, with potential earnings in the 15-30% range. And, American Funds offers some of the lowest ongoing management fees in the market. I'm not trying to sell anyone on this board an investment, but I did want to point out that there are other options that don't require $1000 minimum investments (like Vanguard or Fidelity). There are many options available to young savers, and I agree with Mr. Spitzer (whom I must say is normally on the other side fo the political spectrum from my redneck, southern butt) that HRB did take advantage of these clients and most likely put them in poor investments relative to their objectives (rule #1 in advising clients). My other question is, who is "selling" these funds to the client? It is illegal, at least here in NC, to sell a security without a license. Am I supposed to believe that there is a licensed securities salesperson in every HRB office? I would venture to say NO.

Just my 2 cents worth!