Current Ethical Issues in Business
Current Ethical Issue in Business
PHL/323
Current Ethical Issue in Business In today’s changing world of economical and social standings, individuals have to be aware of how ethical issues are of the utmost importance in the 21st century corporate world. The following paper will show the reader how a certain company deals with the ethical responsibilities and how actions of not following them of have consequences, not for just the company, but the consumers as well. The examination of which ethical theories should apply to this situation will be shown in order to broaden the insight of how this could have been avoided. The company with whom this issue is based upon involves H&R Block and fraudulent Express IRA accounts that have some states claiming these accounts cost more then what the customer earns. The basis of how this happened as well as the how their leadership handled this problem will be discussed throughout the course of this paper. First, we will be discussing what H&R Block does and what this situation dictates.
Basis of this Issue
H&R Block is a tax preparing service that has been notified of a potential lawsuit due to misleading customers into investing in a retirement account where customers lose money instead of profiting for retirement. In fact, customers are told of this program while having their taxes filled out and are about to receive a lump sum of cash. According to Maull, the lawsuit, filed in Manhattan’s state Supreme Court, says Block advised clients to buy an “unsuitable, fraudulently marketed, poorly performing, fee-ridden ‘retirement vehicle’ called the Express IRA,” an account that shrinks over time (Maull, 2006). These accounts have been reported to have interest so low, that over time the costs of fees and other expenses of maintaining the account costs more then being made in the interest; hence shrinking the account. Additionally, H&R Block could be
PHL/323
Current Ethical Issue in Business In today’s changing world of economical and social standings, individuals have to be aware of how ethical issues are of the utmost importance in the 21st century corporate world. The following paper will show the reader how a certain company deals with the ethical responsibilities and how actions of not following them of have consequences, not for just the company, but the consumers as well. The examination of which ethical theories should apply to this situation will be shown in order to broaden the insight of how this could have been avoided. The company with whom this issue is based upon involves H&R Block and fraudulent Express IRA accounts that have some states claiming these accounts cost more then what the customer earns. The basis of how this happened as well as the how their leadership handled this problem will be discussed throughout the course of this paper. First, we will be discussing what H&R Block does and what this situation dictates.
Basis of this Issue
H&R Block is a tax preparing service that has been notified of a potential lawsuit due to misleading customers into investing in a retirement account where customers lose money instead of profiting for retirement. In fact, customers are told of this program while having their taxes filled out and are about to receive a lump sum of cash. According to Maull, the lawsuit, filed in Manhattan’s state Supreme Court, says Block advised clients to buy an “unsuitable, fraudulently marketed, poorly performing, fee-ridden ‘retirement vehicle’ called the Express IRA,” an account that shrinks over time (Maull, 2006). These accounts have been reported to have interest so low, that over time the costs of fees and other expenses of maintaining the account costs more then being made in the interest; hence shrinking the account. Additionally, H&R Block could be
References: Lammartino, N. (2006). H&R block defends its express IRA product and delivers strong rebuttal to NEW YORK AG 's attack. Retrieved Mar. 25, 2006, from Press Center Web site: http://hrblock.com/presscenter/pressreleases/pressRelease.jsp?PRESS_RELEASE_ID=1435. Maull, S. (2006). H&R block sued for fraud. Retrieved Mar. 25, 2006, from http://www.denverpost.com/business/ci_3604937. "H & R Block, Incorporated" International Directory of Company Histories, Vol. 29. St. James Press, 1999. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group. 2006. http://galenet.galegroup.com.proxy.wm.edu/servlet/BCRC Spitzer, Eliot “H&R BLOCK SUED FOR FRAUDULENT MARKETING OF IRAS” http://www.oag.state.ny.us/press/2006/mar/mar15a_06.html Spitzer, Eliot “H&R Block exhibits” Supreme Court of the State of New York County of New York, March 15, 2006 http://www.oag.state.ny.us/press/2006/mar/HR%20Block%20Exhibits%20(Final).pdf