What recourse do I have with a homestead exemption tax refund scam?

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What recourse do I have with a homestead exemption tax refund scam?

A financial company contacted me and said I was owed a tax refund from the county. They said they could file the paperwork to get me the refund. I signed the forms allowing them to proceed on my behalf. After months of non-response from this company, I contact my county tax office to check the status. Turns out they hadn’t filed any paperwork on my behalf and I was not supposed to get a refund of any kind. I receive a collection letter from them saying I now owe them the total amount of my non-existent refund and that they would take legal action and possibly put a lien on my home.

Asked on November 24, 2010 under Bankruptcy Law, Texas

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You should sue the company for fraud.  Fraud is the misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce your reliance.  You justifiably relied to your detriment.  Fraud is both civil and criminal.  In addition to your lawsuit for fraud, you should contact the Attorney General's office in your state so that the Attorney General can pursue criminal prosecution of the company. Most likely, there have been other victims of this scam.

In addition to your cause of action (claim) for fraud in your civil lawsuit, you should include a separate cause of action for abuse of process if a lien is actually placed on your home.  If a lien has NOT been placed on your home, then a cause of action for abuse of process would NOT  be applicable.

Your damages (the amount you are seeking to recover in your lawsuit) for fraud would be your out-of-pocket loss.  Given the nature of this scam, you might also want to seek punitive damages against the company.  Punitive damages would be an amount to punish their malicious acts. 

 


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