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Consumer Groups File Complaint Against H&R Block

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WASHINGTON (AP) -- Several consumer groups filed a complaint Tuesday with the Treasury Department, charging H&R Block with improperly marketing mortgages and other financial services to taxpayers who use an Internal Revenue Service Web site to access the company's free tax preparation service.

H&R Block said it adheres to a 1999 law that allows financial institutions to share customer information with their affiliates. That law repealed the Depression-era barriers that separated banking, insurance and securities systems.

"The consumer groups' claims are inaccurate," H&R Block said in a written statement. "In fact, H&R Block secures its clients consent twice."

H&R Block also said no qualified user is blocked from using the free tax preparation service based on the refusal to receive marketing messages.

The company is one of 17 offering free tax preparation software through the IRS Web site as part of a program to encourage electronic filing.

The consumer groups, led by the publisher of Consumer Reports magazine, said taxpayers who use free H&R Block tax preparation services through the IRS Web site get pop-up solicitations for other H&R Block services. For example, taxpayers who enter their mortgage interest information get a computer prompt about refinancing.

If the taxpayer chooses to find out about refinancing options, the program provides two options. The user can call a toll-free number or provide more detailed mortgage information and then receive a call from an H&R Block agent. H&R Block offers their free filing service to taxpayers with $34,000 or less in income.

"This new level of marketing, based on the information a taxpayer enters into his tax return using Free File, is extremely troubling and requires enforcement action by Treasury and the Internal Revenue Service," the consumer groups said in their complaint.

The Treasury Department has asked the IRS to review the allegations to ensure there are no violations, said department spokeswoman Tara Bradshaw.

A new user trying to enter the H&R Block site must agree to a licensing agreement, which includes a privacy statement, in order to access the tax software.

That agreement describes the types of information that can be collected, and it says the data can be disclosed to affiliates that offer tax, mortgage, investment and banking products.

It also states that a user can call client relations or visit customer support on the Web site to limit the promotions received from H&R Block.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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