LV firm hit with refund lawsuit

Grace Leong

Wednesday, Sept. 5, 2001 | 11:05 a.m.

National Audit Defense Network Inc. of Las Vegas, already the subject of hundreds of consumer complaints, is now being sued by a San Diego man alleging the tax audit defense company cheated thousands of its clients nationwide when it allegedly refused to honor its "no questions asked" money back guarantee.

National Audit denies cheating its customers and also disputes the validity of consumer complaints filed against it with the state of Nevada and the Better Business Bureau in Las Vegas.

Eugene Morrill filed a class action lawsuit against National Audit, 4330 S. Valley View, Suite 114, in the San Diego Superior Court on Aug. 17. Morrill, who said he paid $1,024 for National Audit's tax services in March but later decided to cancel the services, said it refused to refund his monies even after he timely requested the refund.

National Audit is accused in the lawsuit of using delay tactics to avoid making refunds, "either by imposing previously undisclosed limitations on the 'unconditional' refund representation, or simply refusing to return monies paid."

Morrill said he received his refund after the lawsuit was filed.

But he is proceeding with the suit because he said there are potentially thousands of National Audit's clients who paid $750 to $1,000 for tax reduction and IRS audit defense services and then requested refunds but didn't receive them.

Alan M. Mansfield, Morrill's attorney, said: "I believe National Audit is withholding hundreds of thousands of dollars because the average client paid $1,000 for its services."

"Morrill contacted Utility Consumers' Action Network (UCAN), a San Diego consumer information and advocacy group, and tried to resolve his problem informally. But when that failed, UCAN advised him to contact an attorney," Mansfield said.

Morrill's suit alleged National Audit doesn't disclose yearly consultation and representation fees it charges and allegedly markets its business through multilevel marketing by offering financial incentives to members who refer other people to the company.

Mansfield said Morrill, 82, seeks an order for an asset freeze to be imposed on all money belonging to the class members and for "up to three times such amounts to be paid to 'senior citizens"' if the company's conduct is found to have violated California's Consumer Legal Remedies Act, which has added protections for senior citizens and disabled persons.

Morrill isn't the first client to complain or make inquiries about National Audit.

The Better Business Bureau in Las Vegas, which said it has received 350 complaints from the company's clients in the last three years, said the company has an unsatisfactory record with the bureau because it failed to "eliminate the source of consumer dissatisfaction."

The bureau, which said it has received about 1,161 phone enquiries about the company so far this year, compared with 1,100 enquiries in 2000, noted that a significant number of these complaints involved National Audit's refund policy.

Separately, the Nevada Consumer Affairs Division said some 85 complaints have been filed against National Audit in the last 12 months.

Patricia Jarman-Manning, the state consumer agency's commissioner, declined comment on whether the agency plans any action against the company.

But she said the number of complaints "would warrant a closer look as to their nature and why the state is getting such a number of complaints about the company."

Cort Christie, National Audit's CEO, disputed the allegations.

"Morrill's lawsuit was filed after the refund went out. To date, every client that has requested a refund within a 30-day period has received a refund. In fact, we've had individuals whom we've refunded even though they filed requests in 90 days instead of the 30 day period."

"We've satisfied 99.9 percent of people who worked with us. We have issues with the (Better Business Bureau) on how they document complaints and how they've gotten the information to us," he said.