• January 4, 2010

H&R Block Inc will pay millions of dollars to settle a New York lawsuit alleging that the company fraudulently marketed retirement accounts.

New York Attorney General Andrew Cuomo said the terms of the settlement include the refund of between $11.4 million and $19.4 million in fees to customers nationwide who opened one of its Express IRAs, a type of individual retirement account. The size of the refund depends on the number of claims made.

H&R Block will also pay $750,000 in fines and other costs to the state, and convert Express IRAs into new retirement accounts that do not charge fees. The company has also settled private class-action lawsuits based on the same allegations which were pending in the federal court in Kansas City, Mo., where the company is based.

New York had accused H&R Block of steering more than 600,000 customers to Express IRAs, without disclosing hidden fees that wiped out the interest that 85% of them could earn. Eliot Spitzer, Cuomo's predecessor, had first sued H&R Block over the marketing of Express IRAs in March 2006.

The settlement comes as H&R Block begins marketing "H&R Block At Home" software via a TV spot, a Facebook fan page and YouTube channel.--Tanya Irwin