Jackson Hewitt is being accused of brokering loans without the proper Louisiana broker license and bond in a recent class action.
The lawsuit, removed to federal court in New Orleans on June 9, asks the court to force Jackson Hewitt to return all fees, sums, interest and other charges received related to loans it brokered in Louisiana.
Individually and on behalf of all others similarly situated, Cecile Carriere filed the class action against Jackson Hewitt Tax Services, Jackson Hewitt, and 1040, Inc. doing business as Jackson Hewitt Tax Service, originally in St. Tammany Parish District Court on April 29.
The lawsuit argues the defendants' primary source of income is not from tax preparation services but from brokering loans and other financial products. However, the defendants are not licensed or bonded as Louisiana loan brokers, the suit claims.
Jackson Hewitt is accused of not providing customers with the required loan-broker disclosures. The lawsuit also accuses the defendants of making false and misleading representations and omitting material facts about fees and interest when brokering loans.
Carriere claims the defendants have brokered and continue to broker numerous types of loans including refund anticipation loans, "Money Now Loans," "Holiday" or "HELP" Loans, "Flex Loans," and "iPower" or "iAdvance" Loans and credit lines.
According to the complaint, "a tax return preparer who brokers only refund anticipation loans is exempt from the restrictions set for in both loan broker statutes but, if the tax return preparer brokers a loan other than a refund anticipation loan, or in addition to a refund anticipation loan, the tax return preparer must be licensed."
On behalf of the class, Carriere is seeking compensatory, exemplary, special and punitive damages, plus interest, all costs and attorneys' fees.
Carriere is asking the Court to issue an injunction ordering the defendants to cease brokering loans until they obtain a loan broker license and bond.
Attorneys Brian Shartle, David Israel, Harold Homes and Michael Alltmont of Sessions, Fishman, Nathan & Israel in Metairie are representing the proposed class of plaintiffs. A jury trial is requested.
U.S. District Judge Mary Ann Vial Lemmon is assigned to the case.
Case No. 2:10cv01709