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Block, HSBC Settle Predatory Lending Suit

Chicago (Aug. 31, 2006) – Tax prep giant H&R Block Inc. announced that a federal judge has approved a $39-million settlement of a class-action lawsuit brought by customers over the company’s refund anticipation loans. A U.S. district court judge approved the settlement, the group’s third effort to reach a agreement in the suit, which has dragged on since 1998. Block and co-defendant Beneficial National Bank — now owned by London-based HSBC — will split the payment.

The lawsuit is one of several alleging that Block failed to disclose high costs and other features of RALs made to more than 17 million clients over a 13-year period.

In December 2005, Block announced a combined $62.5 million settlement for four similar class-action suits involving 8 million clients. Another set of claims, alleging federal racketeering violations, is scheduled for a hearing next month. Earlier this year, California Attorney General Bill Lockyer filed another lawsuit seeking damages for 1.5 million California residents with refund loans dating from 2001. Block has denied those allegations and is fighting the suit

Posted By Timothy Blake

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HSBC is cutting back in the U.S. after its 2003 purchase of Household International Inc. required it to set aside more than $65 billion for bad loans

Update Note

HSBC car loans were sold to Santander USA in 2010 :: Most HSBC credit cards became Capital One credit cards in 2012 :: HSBC horrible predatory home mortgages are in run-off