Wilmington, NC – State officials say beware of tax refund loans that come with interest rates as high as 300%.
IRS statistics show more than a 500,000 taxpayers in North Carolina signed up for the short-term loans in 2004.
The selling point is getting an on-the-spot refund instead of waiting two weeks for the IRS, says Mark Pierce, North Carolina Deputy Commissioner for Banks.
At the end of the process people are given the option of getting their money now, and they do have a disclosure form that describes what the interest rate might be. But for too many people, it's the signing of lots of documents right at the end of the process that makes it confusing.
Pierce says the loans could cost taxpayers upwards of $100. He says this is one of the peak times for the refund loan offer as last minute taxpayers scramble to file to their returns