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JK Harris Defaults on Class Action Settlement

Submitted by admin on Tue, 7/12/2011 - 12:00 am

JK Harris has stopped making payments on a $6 million class action settlement suit reached in 2007 with more than 18,000 former clients. The company has paid about $2 million towards that settlement, but still owes about $4 million. Apparently, no payments have been made since early last year. The South Carolina Department of Consumer Affairs has received 137 complaints about JK Harris in the past three years, according to Carri Grube Lybarker, the acting administrator for the department.

For those awaiting the next payment from the class-action settlement, it’s unclear when the check might arrive. Mario Pacella, a Columbia attorney representing the plaintiffs in the class action case, said the settlement would have been larger to if not for the limited finances of the company (JK Harris). “They paid JK Harris to settle their tax debts for pennies on the dollar,” he said of the plaintiffs. “Now, they have gotten pennies on the dollar back from JK Harris.”

With heavy debts and an unpaid multi-million-dollar settlement, JK Harris this year agreed to settle another round of consumer complaints with various state attorney generals’. The deal with the Texas attorney general’s office will cost the company $1.2 million, and a Tennessee court last month held the company in civil contempt, and assessed costs and penalties, for violating the terms of a 2008 settlement with attorneys general in 18 other states.

Such a shame that the taxpayers who needed help, received what they thought would be some relief from their tax problem, are still left with their tax problems and no relief from the victory of a class action suit to return funds to them.