The Chicago Personal Injury Law Blog

Illinois AG Lisa Madigan Goes After Mo' Money Tax Preparers

Illinois Attorney General Lisa Madigan filed a Mo' Money fraud lawsuit against the national tax preparation company. In the suit, Madigan claims that Mo' Money swindled its customers by promising fast refunds, while instead charging them hidden fees and mistake-riddled tax returns.

As usual, the poor get poorer as disreputable companies like Mo' Money allegedly targeted low-income customers' vulnerability with promises of instant refunds and fast cash, said the Attorney General in her press release. But after getting their hooks into the customers, Mo' Money charged customers a bevy of hidden costs and fees -- as much as $700 per person -- before the customers ever saw a penny in refunds.

AG Madigan sued Mo' Money for $800,000 and seeks to shut down the company's locations in Chicago and East St. Louis.

To win her case, Madigan would likely have to show that Mo' Money engaged in deceptive advertising or deliberately misled customers about how much they would be charged for the service. Given that the prospective users were likely low-income individuals with less financial sophistication, Mo' Money probably had more of an obligation to explain the downside of its products.

As a general warning, Madigan said that during tax season consumers should be aware of the high cost of refund anticipation products - where consumers would effectively get a loan for their anticipated tax refund. These products often have interest rates running as high as 150 percent and can seriously harm poor consumers who would need the products the most.

Mo' Money has been the target of 76 complaints in Madigan's office and this Mo' Money fraud lawsuit would put the business out of business in the state forever.

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