H&R Block Military Overcharge Lawsuit: Are Active-Duty Members Affected?

A federal class action lawsuit filed in 2026 accuses H&R Block and its banking partners of charging active-duty military service members and their dependents hidden fees on tax refund advance loans. Plaintiff Joshua Montgomery filed the case — Montgomery v. HRB Tax Group Inc., et al., Case No. 3:26-cv-00759-LL-MSB — in the U.S. District Court for the Southern District of California. The lawsuit claims those fees push the loans’ true interest rates well above the 36% federal cap the Military Lending Act sets for covered borrowers. No settlement exists at this time.

Quick Facts

Current Status & What Happens Next

• The lawsuit is in its earliest stage; Montgomery filed the complaint in 2026 in the Southern District of California and seeks to represent a nationwide class.
• The court has not yet certified the class, set a trial date, or scheduled a hearing on any motion to dismiss.
• No opt-out or objection deadlines apply at this time; those dates will become available only if the court approves a class settlement in the future.

What Is the H&R Block Military Lending Lawsuit About?

The lawsuit claims that H&R Block and co-defendants Pathward, N.A. and Emerald Financial Services offer two short-term loans — the Refund Advance Loan and the Emerald Advance Loan — to active-duty military service members with fees and contract terms that violate the Military Lending Act (MLA), a federal law designed to protect military borrowers from predatory lending practices.

H&R Block markets the Refund Advance Loan as having no fees and a 0% annual percentage rate (APR). However, the lawsuit argues that borrowers must open accounts with Pathward — including prepaid debit cards or refund transfer accounts — that each carry their own fees. The complaint states that military members who take the loan routinely pay a $39 refund transfer fee and a $25 check disbursement fee.

Because borrowers pay those fees as a condition of receiving the loan, the lawsuit says the MLA requires H&R Block to include them in the Military Annual Percentage Rate (MAPR) calculation. When annualized over the few days or weeks the loan stays open, the effective MAPR far exceeds the MLA’s 36% cap — especially for smaller loan amounts.

Who Is Eligible to File a Claim?

Because no settlement exists, there is currently no claim form to file. However, the proposed class covers two groups. You may be part of this lawsuit if:

• You were an active-duty military service member covered by the Military Lending Act at the time you took out the loan.
• You are a dependent of an active-duty service member and took out an H&R Block Refund Advance Loan or Emerald Advance Loan.
• You paid any finance charge connected to the loan — including a refund transfer fee or check disbursement fee — as part of receiving the advance.
• You entered into a loan agreement with H&R Block that included a mandatory arbitration clause, a class action waiver, a jury trial waiver, or other legal notice restrictions that the MLA prohibits.
• You took out the loan at any H&R Block location that offered the Refund Advance Loan or Emerald Advance Loan product through Pathward, N.A.

If you are unsure whether your loan qualifies, you should consult a licensed attorney who handles Military Lending Act cases.

How Much Can You Receive?

No settlement amount exists at this time, so payout figures are TBD. However, the plaintiff’s legal team has indicated the types of relief they seek:

• Actual damages — money to compensate for fees paid above the legal MLA limit.
• Statutory damages — under the MLA, borrowers may recover actual damages of no less than $500 for each violation.
• Punitive damages — additional damages intended to penalize the defendants if the court finds the conduct willful.
• Declaratory and injunctive relief — a court order requiring H&R Block to change its loan products so they comply with the MLA going forward.

Final payout amounts — if any — will depend on how the court rules and whether a settlement is reached. Check back here for updates.

How to File a Claim

No claim form is open right now because the case has not settled. If a settlement is reached in the future, these steps typically apply:

Step 1 — Visit the official settlement administrator website (TBD — check back for updates) Step 2 — Confirm your identity and military status Step 3 — Enter details about your H&R Block loan, including the fee amounts you paid Step 4 — Upload any supporting documentation (loan statements, fee receipts) Step 5 — Submit your claim before the official deadline Step 6 — Save your confirmation number for your records

Estimated time to complete: 10–15 minutes (once a claim portal opens)

Important Deadlines & Dates

Frequently Asked Questions

Do I need a lawyer to file a claim? 

You do not need a lawyer to file a claim once a settlement opens. Class members can typically submit claims on their own through the official settlement website. However, if you want to pursue an individual case or opt out of a class settlement, consulting a qualified attorney is a good idea.

Is this lawsuit legitimate? 

Yes. Montgomery v. HRB Tax Group Inc., et al., Case No. 3:26-cv-00759-LL-MSB, is a real case filed in the U.S. District Court for the Southern District of California. The lawsuit is in active litigation and no settlement has been announced yet.

When will I receive my payment? 

No payment timeline exists at this stage. Payments only become possible after the court certifies the class, the parties reach a settlement, and a judge grants final approval. That process typically takes one to three years after a lawsuit is filed.

What if I missed the claim deadline? 

No claim deadline has been set yet. Once a settlement is reached and a deadline is announced, missing that date will likely bar you from receiving money. Sign up for updates so you don’t miss important dates.

Will a settlement payment affect my taxes?

 Settlement payments can be taxable income depending on what they compensate you for. Damages for economic losses such as fees overpaid may be taxable. You should speak with a tax professional once you receive any payment to understand your specific obligations.

What is the Military Lending Act, and why does it matter here? 

The Military Lending Act is a federal law that caps interest rates on consumer loans to active-duty service members and their dependents at 36% MAPR. The MLA also specifically prohibits creditors from requiring military borrowers to sign mandatory arbitration clauses or waive their right to participate in class action lawsuits. The lawsuit claims H&R Block’s loan products violated both the rate cap and these borrower-protection rules.

What are the Refund Advance Loan and Emerald Advance Loan? 

The H&R Block Refund Advance Loan lets qualifying customers access up to $4,000 against their expected tax refund, typically within minutes of filing, with H&R Block advertising the loan as carrying 0% interest and no loan fees. The Emerald Advance Loan carries a stated APR of approximately 35.9% and is also originated by Pathward. The lawsuit claims both products impose additional account fees that push the effective MAPR beyond the MLA’s legal limit for military borrowers.

Can H&R Block retaliate against me for joining this lawsuit? 

Federal law prohibits lenders from retaliating against borrowers who assert their rights under the Military Lending Act. If you believe you experienced any retaliation, contact an attorney immediately.

Sources & References

• U.S. District Court for the Southern District of California — Montgomery v. HRB Tax Group Inc., et al., Case No. 3:26-cv-00759-LL-MSB
• Federal Trade Commission — Military Lending Act overview
• Department of Defense — Military Lending Act regulations (32 C.F.R. Part 232)
• Reuters / AP — Check for coverage updates on the Southern District of California docket

Last Updated: March 11, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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