NEW YORK (WCBS 880) – If you are thinking of signing up for an instant refund this tax season, some New Jersey officials want you to think again.

The promise of fast cash and an instant tax refund may seem attractive in these tough economic times, but WCBS 880’s Monica Miller spoke with Tom Calcagni of the New Jersey Division of Consumer Affairs who said it’s too good to be true.

WCBS 880 Reporter Monica Miller spoke with officials who explain why “instant refunds” are deceptive

“What the consumer is getting is getting is not a refund at all. But really, a short-term high-interest loan that’s secured by that person’s anticipated tax refund,” said Calcagni.

Calcagni says he’s seen interest rates as high as 25 percent in a recent statewide sweep of more than 500 tax preparation offices.

Calcagni says filing taxes online and using direct deposit doesn’t cost anything extra and they can recieve their refund in less than three weeks.

The Consumer Affairs Division advises consumers who consider obtaining an Refund Anticipation Loans RAL despite the costs should find out how long it will take to get their refund if they file their returns with the IRS without signing up for an RAL. Those who choose to obtain an RAL should carefully read any loan documents, especially the fine print, before signing. Any such documents should include:

* Annual percentage rate of the loan
* Schedule of all charges and fees
* Maturity date of the loan
* List of all charges for electronic filing
* Date or period within which the loan money will be received
* Who is responsible for paying the loan, if it exceeds the actual refund minus any interest and fees.

Watch & Listen LIVE