TRENTON – In order to better protect New Jersey taxpayers and consumers from being subjected to so-called “predatory tax refund anticipation practices,” as well as other commercial dealings deemed as abusive, the Senate Commerce Committee advanced a package of bills that would update and strengthen the Consumer Fraud Act, and provide other safeguards involving anti-trust violations as well as bringing greater clarity and transparency to common service contracts.
Under the first bill, S-891, sponsored by Senator Nellie Pou, tax preparation services would be prohibited from binding clients to refund anticipation check agreements for their tax return completions. The bill would also prohibit tax preparers from providing, offering or advertising refund anticipation loan or check services as free if the service results in, or is predicated upon, the assessment of higher or additional fees.
Additionally, currently required itemized statements of service charges and fees would also need to include charges and fees associated with refund anticipation loans and checks, as well as interest charged, including the estimated amount if a refund is delayed.
“Tax filing season serves as an opportunity of relief for many Americans facing difficulties balancing their family budgets. Although these refunds provide a needed boost at just the right time for many families, the filing process can be difficult to navigate, and low-income families in need of assistance can find themselves exposed to consumer protection risks when working with tax preparation services,” said Senator Pou (D-Passaic/Bergen). “This legislation will put the onus on tax preparers to explain fully to clients what is involved in a refund anticipation check, and prohibit them from requiring clients to enter into such agreements.”
The bill would expand current protections to cover these predatory practices, by coupling consumer protections against refund anticipation loans and checks, and would also increase cost transparency and allow for price comparison of these services.
A recent Consumer Federation of America (CFA) poll found that 89% of respondents supported requiring paid preparers to supply an upfront list of fees.
A second bill, S-901, also sponsored by Senator Pou, would update provisions of the Consumer Fraud Act, as well as the New Jersey Antitrust Act. The bill would update certain notice requirements for actions alleging consumer fraud violations and allow indirect purchasers, such as municipalities or the state, to be added as parties who can receive damages for antitrust violations.
Further, the bill would require that private lawsuit notices be sent electronically to the Attorney General within 24 hours of filing rather than the currently required 10 days.
A third bill, S-902, also sponsored by Senator Pou, would establish consumer protection requirements for service contract providers, or companies that offer contracts purporting to cover repairs to a consumer’s home, car, or other goods.
The bill would prohibit service contract providers or administrators from including the words “insurance”, “casualty”, “surety”, “mutual” or any other word descriptive of the insurance, casualty, or surety business in its products, and description of products, advertisement or any other materials. Currently, providers or administrators are prohibited from using these words in their name.
“Because of the lightning speed of technology nowadays, even the most practical household contracts, maintenance or services can fall prey to predatory practices, misinformation, or a lack of information that might harm New Jersey consumers,” added Senator Pou. “Our goal with these bills is to make our state more affordable, and make it operate more equitably and more efficiently for people just trying to live their daily lives.”
A fourth related bill, S-1104, also drafted in the name of efficiency, would revise requirements and processes for issuing temporary courtesy licenses and certificates to nonresident military spouses. Under the bill, sponsored by Senator Jean Stanfield and Senator Pou, courtesy licenses and certificates issued by the State Board of Examiners, NJ Board of Nursing, and other professional and occupational licensing boards to nonresident military spouses would be revised.
For example, current law provides a process for an individual who is licensed to teach in another state and is married to an active duty member of the military, who has been transferred to New Jersey, to obtain a temporary instructional certificate to be employed as a teacher in state while completing any additional requirements for a New Jersey instructional certificate. That temporary certificate, now valid for 180 days, with the possibility of another 180-day extension, would be amended to provide that the temporary instructional certificate will be valid for 365 days, also with the possibility of extension.
The bills S-891, S-901, S-902, and S-1104 all advanced by votes of 5-0