The biggest tax preparer in the US, H & R Block, has consented to a payment of $4.85 million to settle the early 2006 lawsuit filed by the California attorney general, Jerry Brown. The terms of the arrangement restricted to three years, a Block spokeswoman said the company’s statement about the settlement was being prepared.

Out of the total settlement amount to be paid by the Block, $2.45 million will be for providing reimbursement to California consumers who availed the loans during the seven-year period - January 1, 2001, to December 31, 2008. Moreover, $500,000 will be paid in penalties, and $1.9 million in fees and costs.

Though Block has been continuously denying any misconduct, the lawsuit was aimed at its “marketing” and “cross collection,” wherein the tax refund of a client was withheld for paying debt from a previous loan. It was alleged that the company used misleading advertisements to cover up the refund-anticipation loans as early tax refunds, and resorted to unmerited debt-collection practices to adorn the proceeds of the refund.

In fact, the Block’s refund-anticipation loans have been in troubled waters earlier too. In 2006, Block and Beneficial National Bank settled a 1998 nationwide federal class-action Chicago lawsuit, related to the loans, for $39 million.

Later, in November 2002, the company agreed to pay $25.7 million towards the settlement of a Texas suit; and in December 2005, the company consented on a $62.5 million settlement for four state class-action lawsuits involving more than 8 million consumers!