By Cassi Feldman

Can't wait for your tax refund? No problem. With April 15 right around the corner, H&R Block is advertising "refund anticipation loans" (RALs) that can get you your money in just two days.

But there's a catch, say national consumer groups, and it's an expensive one.

A recent report by the National Consumer Law Center (NCLC) and the Consumer Federation of America found that H&R Block and other tax preparers are charging outrageously high annual interest rates for these loans – 67 to 774 percent – and preying on low-income clients.

Forty percent of taxpayers who received RALs in 2000 (approximately 4.32 million people) were eligible for the earned-income tax credit, a federal incentive program for poor working families, the report shows. By targeting this same population for loans, companies such as H&R Block skimmed an estimated $324 million from those who need it most.

"The purpose of the earned-income tax credit is to lift people out of poverty and encourage work," said Shelley Curran, analyst with Consumers Union's West Coast Regional Office. "Not to provide a business model for private companies to provide high-cost services to low-income consumers."

Meanwhile, the loans themselves may be unnecessary. According to the Internal Revenue Service, filing taxes electronically can yield a refund in as little as 10 days. If that's not quick enough, an average credit-card advance offers a much lower interest rate than the average RAL.

H&R Block recently partnered with ACE Cash Express, a check-cashing company. According to the NCLC report, the ACE machines installed in H&R Block offices across the country charge customers an additional 4 percent fee to cash their RAL check.

How does all this affect the average customer? Assuming a taxpayer was expecting a $1,900 federal refund, the average in 2000, she would pay H&R Block approximately $139.95 for tax preparation with a RAL, Curran said. If she cashed the check at an ACE Cash Express machine, she'd be charged another $73.40 – a grand total of $213.35 for an eight-day loan.

"We don't decide for any tax client whether they should take out a refund anticipation loan or not," H&R Block spokesperson Denise Sposato said. "We have offered these since 1986 for one simple reason – our clients demand it." But there may be another reason. According to its own financial statements, H&R Block made an estimated $68 million in net profits on RALs in 2001.