NEW YORK - H&R Block Inc. will refund up to $19.4 million to customers who bought an individual retirement account product that New York’s attorney general, Andrew Cuomo, claims was a money-loser because it charged more in fees than it paid in interest.
He announced the settlement yesterday.
Block will refund between $11.4 million and $19.4 million, depending on the number of claims made. Those eligible for refunds will be contacted by a court-appointed administrator.
In addition to providing full refunds of fees it charged to all customers who purchased an Express IRA since 2000, H&R Block will pay $750,000 in fines, fees, and costs to the state.
H&R Block will also convert all existing Express IRA accounts into a new IRA without fees.
Cuomo said Block enticed as many as 600,000 low- and middle-income customers into buying Express IRAs, telling them the IRA paid “great rates’’ and was “a better way to save.’’
About 85 percent of the customers paid more in fees than they earned in interest, Cuomo said.
The settlement resolves a lawsuit filed by Cuomo. It alleged that senior managers at H&R Block knew many customers were losing money on the IRAs, yet took no action.
H&R Block officials were not immediately available for comment.