Navajo Couple Sues T&R Tax Service after Being Charged 385% Interest

Published July 29, 2017

GALLUP – A class-action lawsuit has been filed in federal court in Albuquerque accusing a border town tax service with violations of the Truth in Lending Act.

Named as defendants in the suit are T&R Market Inc., Tancorde Finance Inc. and T&R Tax Service Inc. – companies that provide thousands of loans to reservation residents during tax season.
The named plaintiffs in the case are William Dejolie and Sammia Dejolie of Gallup.

They claim they obtained a $1,250 loan from the companies and were charged a 385 percent annual interest rate.

The lawsuit said that while the New Mexico Legislature passed laws in 2017 prohibiting these types of loans, they only applied to payday loans and not loans to be repaid by income tax refunds.

While tax anticipation loans are popular, according to the lawsuit, companies that provide them uniformly underreport to their clients how much they are paying in interest on the loan.

The suit states that the Dejolies, who are enrolled members of the Navajo Tribe, are also filing on behalf of others who have been misled by company officials when they received tax anticipation loans.

According to the lawsuit, the Dejolies went to the T&R Tax Service Office in the Rio West Mall in Gallup to get a “Holiday loan” and repay it with their 2016 tax returns, which company officials estimated would be more than $8,000.

They decided to borrow $1,250 and they were told they would make two repayments of $762.50, which would have included $250 for interest and a $24 document fee.

This turned out to be an annual percentage rate of 385 percent, according to the lawsuit, substantially higher than the Dejolies thought they were paying when they took out the loan.

Editor’s Note: This article was first published in the Navajo Times. Used with permission. All rights reserved.

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