Don’t Lose Tax Refund to Sharks

It’s a treat to get a tax refund from the Internal Revenue Service (IRS). But life can turn less rosy if you lose your refund to a fringe lender.

A fringe lender is a loan shark or scam organization that will take your tax refund as a “down payment” on a loan. But it’s a loan you’ll never be able to repay because eventual interest rates can range from 40% to more than 700%.

Many fringe lenders are located in check-cashing outlets, casinos, and reservations--some are even in car dealerships.

They offer refund anticipation loans: If you don’t have your refund check yet from the IRS, they will lend you the money now in exchange for your refund check once it arrives. While the fringe lender is waiting for your refund check, it will be charging excessive fees..

If you’re in need of cash or an advance to pay bills, ask your credit union for help. In most cases, Air Force Federal Credit Union provides reasonable rate loans that can help when you need it most.

Consult your tax advisor for additional detail.