Madigan warns against tax-refund loans

With the tax season fast approaching, Illinois Attorney General Lisa Madigan is warning the state's residents about the high cost of the tax-refund anticipation loans offered by some tax preparers.

Madigan said Monday that consumers can make the mistake of considering such loans simply as advances on their expected refunds at the time they file their taxes. In reality, she said, they are high-cost, short-term loans that have fees attached for such things as tax filing, document preparation and electronic filing. Those fees, she said, are deducted before the refund is even issued.

Madigan noted that taxpayers can receive their full refunds in as little as 10 days if they file their returns electronically and have their refunds deposited directly into a bank account.