H&R Block won't offer refund-backed loans in 2012

NEW YORK — H&R Block Inc. says it won't offer refund-anticipation loans during the 2012 tax season because its client base is growing and the appeal of high-cost loans is shrinking.

Kansas City, Mo.-based Block prepared 6.5 percent more tax returns this year, despite losing bank funding for lending money to clients based on their anticipated tax refunds.

The nation's largest tax preparer said it lured 19 percent more first-time customers by offering simple tax preparation and reviews of prior tax returns for free. It also beefed up online tax prep.

Refund-backed loans accounted for 4 percent of Block's revenue in the 2010 season, the last time they were offered. That already was one-third less than in 2007.

Block will continue to let customers use their anticipated refunds to pay for tax preparation.