Group Protests Predatory Lending

The Association of Community Organizations for Reform Now (ACORN)—a consortium of nonprofit groups advocating for increased wages for America's working poor—has had its sights set on Refund Anticipation Loans, a tax-filing service practiced by some accounting companies. And last week, members of the group became extraordinarily proactive, storming a local accounting office and demanding policy reform.

The loans serve as a speedy way for taxpayers to get a portion of their income tax refund, with the companies cutting the customers a check and then charging a commission after effecting the transaction.

According to Matthew Henderson, ACORN's statewide director, the problem is that the loans are rife with hidden charges and unreasonable interest rates that unfairly target low-income families who, for whatever reason, don't have the wherewithal to avoid the service.

As a result, Albuquerque's ACORN chapter, consisting of 2,000 families and scores of volunteers, concocted a raid of sorts on the Jackson Hewitt office on Coors Boulevard last Wednesday afternoon, sending more than 40 sign-waving activists into the business. Henderson said Jackson Hewitt charges unknowing customers as much as 1,800 percent interest for the loan, essentially robbing people blind.

“These people are having money blatantly stolen from them and no one seems to care,” Henderson said, adding that the victims of the loan are often those who can afford it least. “Many people can't afford to lose hundreds of dollars in hidden interest charges. That money is what feeds and clothes their families.”

Jackson Hewitt, however, disputes the predatory nature of the loan program. According to its website, the company prepared taxes for more than 20 million people last year. Less than 35 percent of those were accounts that included extra charges, with many of the people participating in the Anticipation Refund Loan program doing so because they needed the money, not because they were targeted to do so, the website states.

Because Wednesday's raid was planned during the off season for Jackson Hewitt, well after the April 15 deadline for filing taxes, only one beleaguered employee was in the office at the time. Henderson said the event was strategically planned because Jackson Hewitt is in the process of being sold and ACORN wanted to make the new investors aware of the seedy operations they are taking the reins of.

“The new owners of Jackson Hewitt need to know that this company has dramatically impacted thousands of people's lives for the worst,” Henderson said.

ACORN went into the office with a simple demand, to have a letter outlining the wrongdoings of the loan service and their impacts on society sent to the higher-ups at the national level. However, the employee said the office did not have a fax machine and opted instead to call police.

Responding APD officers, striving to keep the situation peaceful, mediated a shaky deal between ACORN representatives and the employee, who in the end agreed to take the letter and promised to hand it up through the company's chain of command. Representatives from Jackson Hewitt's national office refused to comment on the ethical nature of the Refund Anticipation Loan or whether ACORN's actions are affecting any decisions regarding that.

Dana Gallegos, mother of three and one of the more than approximately 4,000 Albuquerque residents who take part in the Refund Anticipation Loan every year, said she was taken advantage of several years ago by the program. She said the decision to participate in the program was a mistake that cost her money she could ill-afford to lose.

“Basically these companies make promises they have no intention of keeping,” Gallegos said. “It's sad to think about, but the money that was taken from me could have gone to my kids, to make their lives better.”

Henderson said despite the failure to get their letter faxed on Wednesday, he considers the day a success, pledging to continue entering similar businesses in Albuquerque until the company takes notice of their claims and agrees to negotiate with ACORN on revising the loan program.

That persistence is a familiar attribute of the 40-year-old advocacy group, who sharpened the skill over the last two years using similar tactics against H&R Block, the nation's largest tax service provider and participant in the Refund Anticipation Loan program. After months of storming the company's offices in several cities across the country and staging protests at their headquarters, H&R Block agreed this year to re-evaluate its programs and investigate whether any of their services unfairly target low-income people.

“We're very happy with the success we've had in the situation with H&R Block,” said Leroy Brown, a senior member of Albuquerque's ACORN chapter. “However, there is still a lot more work to be done and we won't stop until justice is done and people are safe from predatory companies looking to take advantage of them.”