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A federal judge barred H&R Block, the nation's largest income tax preparer, from using misleading phrases to advertise its "Rapid Refund" loan program and ordered it to pay more than $500,000 to an upstart rival.

Block has been sued before over its advertising for "Rapid Refund," in which tax filers receive bank loans for the amount of their anticipated refund. But the financial institutions can charge fees or interest.

U.S. District Judge Raymond Jackson in Norfolk accused H&R Block of deliberately and maliciously using deceptive advertising to draw customers in the Hampton Roads area just as a competing tax preparation service, was launching its business there.

The ruling ordered H&R Block to pay Liberty Tax Service $507,477, representing a portion of Block's profits in Hampton Roads in 2000. The advertising also appeared last year in California, Iowa, New York and Ohio.

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