Mayor Michael Bloomberg is warning New Yorkers to be on guard against unqualified tax preparers and refund schemes revealed in a recent undercover investigation.

During an inspection of more than 1,200 tax preparers across the city, 1 in 3 were found to be misrepresenting qualifications, violating consumer rights and illegally advertising instant or rapid refunds.

Bloomberg said the so-called rapid refunds were nothing more than high interest loans that could wind up costing people a small fortune, 1010 WINS’ Stan Brooks reported.

“What they’re really doing is they’re offering you a loan that can carry very steep interest rates. Sometimes these things have annual rates of something like 500 percent a year,” the mayor said.

The Department of Consumer Affairs focused their investigation on preparers charged with violations in 2009 and 2010 in addition to businesses near immigrant communities. A higher concentration of the violations were found in poorer neighborhoods.

Bloomberg’s words of advice were simple: “Stay away from tax preparers who don’t play by the rules.”

The deadline for tax filing this year is April 18. The city has also made a number of low cost tax preparation options available, which can be found here.

(Source: WCBSTV)