Special Reports

Since this story aired, H&R Block has made some changes. The interest rates which once exceeded 100 percent are now down to an average of 36 percent. The company has also stopped calling its product a "Rapid Refund." They now call it what it is: a refund anticipation loan.

With the new year comes tax season, and places offering same-day refunds in the form of loans may be tempting.

However, consumer groups are warn rapid refunds may be unnecessary and the quick money could be costly.

Julie Burbach could not wait to get her hands on her tax refund. As a struggling single mom, she signed up for Rapid Refund, a loan offered by H&R Block that gives tax refunds on the spot.

When Burbach looked closer at the service, she couldn't believe how much it had cost her.

"I don't think it's good. It's not right," Burbach said.

The year before, H&R Block charged Burbach $201 for tax preparation and Rapid Refund fees. This year, it cost $342.

"It took her about 10 minutes to do my taxes," Burbach said.

Duane Schwarzbauer is a certified public accountant.

"I'm assuming she was just focusing on the refund and probably didn't realize how much she was being charged," Schwarzbauer said.

Schwarzbauer, who also prepares taxes, said customers can get fast refunds just by filing electronically with the IRS.

"The computer takes the information, sends it right to the IRS computer and they get the refund within like two weeks, sometimes within eight days," Schwarzbauer said.

Most people do get their refunds in two weeks. If you want your refund on the spot, the National Consumer Law Center said the average person will pay a 187 percent annual interest rate. Even if you pay your refund loan in within two weeks, the high rate can cost a lot of money.

H&R Block said it is worth the service charge to get a refund two weeks earlier. There is a demand for the Rapid Refund program and some people are willing to pay more to get their money faster.

Two years ago, Rep. Paul Thissen authored a bill requiring Minnesota tax preparers to disclose key information about the loans. Burbach signed those forms.

The forms show how much the interest rate is, how much the refund will be reduced and how fast the refund would come through electronic filing.

WCCO-TV sent an intern to H&R Block. The interest quoted on the Rapid Refund was 154 percent. The intern declined.

Shada Buyobehammond is a board member of Minnesota ACORN, which is a non-profit opposed to these types of loans.

Buyobehammond said there is tax help for poorer people.

"You get them done, preparation done for free," said Buyobehammond. "The government does it for free. It's in City Hall, it's in the Government Center."

Only a fraction of the people who qualify for free help took advantage of the service last year.

Taxpayers who make $37,000 or less or are 60 or older are eligible for free tax preparation help. Those who make $54,000 or less can file taxes electronically for free through the IRS Web site.