State officials issue warning about loan, tax prep scams

MILWAUKEE (WITI) -- There are many legitimate tax preparation services and lenders who help consumers file tax returns and obtain loans. Others, however, may hide their true purpose and get personal financial information under false premises or file a customer’s tax return without consent and keep all or part of any refund.

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) asks for help from the public to be on the lookout for questionable tax and loan practices and to report any suspicious activity to the agency.

“We will take quick action against fraudulent tax preparation businesses,” said Sandy Chalmers, Division Administrator for Trade and Consumer Protection. “If you see questionable practices, give us a call or file a complaint.”

In a version of a tax and loan scam seen over the past couple of years, consumers who apply for a short-term loan at a tax preparation business are surprised to learn that the company has filed a return on their behalf without their consent. In 2012, the Wisconsin Department of Justice took legal action against All Star Tax Service, a Milwaukee-based business, for providing loans to consumers and then filing their taxes without permission and taking exorbitant fees from the tax refunds.

Here are some tips to avoid becoming the victim of tax preparation fraud:

    Anyone suspecting fraudulent activity is encouraged to file a complaint with DATCP. Complaints can be filed online through the DATCP website ( or a complaint form can be requested by calling the state’s Consumer Protection Hotline at 800-422-7128.