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Business in brief

H&R Block, Calif. settle tax-refund loans lawsuit

January 3, 2009
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THE NATION
H&R Block Inc., the biggest US tax preparer, agreed to pay $4.85 million to settle California claims it engaged in deceptive marketing of loans to customers against their expected tax refunds. The lawsuit, filed in 2006, targeted what California claimed was H&R Block's unlawful marketing and "cross collection," when a client's tax refund is withheld by a bank to pay debt from a previous loan. The agreement prohibits H&R Block from selling the so-called refund-anticipation loans as early tax refunds, California Attorney General Jerry Brown said in an e-mail. H&R Block denies any wrongdoing, Brown said. (Bloomberg)

Visteon to cut pay 20% of salaried US employees
About 2,050 US salaried workers at Visteon Corp., the auto parts supplier spun off from Ford, will take 20 percent pay cuts and be limited to four-day workweeks because of carmakers' lower production. The changes take effect next week, a spokesman for the maker of vehicle interior and cooling systems, said. The Van Buren, Mich.-based company has about 35,000 employees, including a salaried workforce of 3,100 in North America. Visteon, which gets about 25 percent of its sales in North America, is among suppliers reacting to automaker production cuts. Visteon hasn't had an annual profit since 2000, the year it was spun off by Ford. (Bloomberg)

Chrysler gets $4b initial funding from Treasury
Chrysler LLC, burning through cash as sales slide, received $4 billion in an initial loan from the Treasury to help stave off a collapse that could worsen a recession. Chrysler completed talks with the Treasury and got its initial payment, according to the company. Chrysler, the third-largest US automaker, might have run out of operating cash by the middle of this month without the aid. Management is now under pressure to restructure the company into a business that can survive in the long run. The loan to Chrysler is part of a $17.4 billion aid package for Chrysler and General Motors Corp. disclosed Dec. 19. (Bloomberg)

Hackers unlock software that controls iPhone 3G
Apple Inc.'s iPhone 3G can be unlocked with new software, allowing the device to run on unauthorized wireless networks, a group called the iPhone Dev Team said. The hackers released a test version of the software, called Yellowsn0w, on their blog this week. The program aims to free iPhone 3G owners from having to get their wireless service from Apple's approved partners, such as AT&T Inc. in the United States. Apple has sought to keep hackers from unlocking the iPhone since it released the original version of the device in 2007. The company designed the phone to only work on authorized networks, selecting exclusive wireless partners around the world. In the United States, an iPhone purchase requires a two-year service contract with AT&T. (Bloomberg)

Banks borrow $8.9b more from Fed discount window
Banks expanded their discount window borrowing from the Federal Reserve by $8.9 billion since last week to stock up on cash at the turn of the year, the central bank's consolidated balance sheet showed. The central bank release also showed discount window lending rising to $93.8 billion as of Wednesday from $84.9 billion the previous Wednesday. Primary dealers cut their borrowings from the Fed to $37.4 billion from $38.1 billion Dec. 24. The $1.3 trillion growth in the Fed's total assets over the past year to $2.265 trillion follows a Dec. 16 Federal Open Market Committee decision to switch the focus of monetary policy to the balance sheet and away from interest rates. (Bloomberg)

Madoff scandal prompts other SEC investigations
US regulators working to untangle Bernard Madoff's alleged $50 billion Ponzi scheme are probing other money managers suspected of using similar tactics, two people with knowledge of the inquiries said. The Securities and Exchange Commission is pursuing at least one case in which investors may have been cheated out of as much as $1 billion, according to one person, who declined to name the manager and asked not to be identified because the probe isn't public. An SEC spokesman declined to comment. (Bloomberg)

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