Only two things are certain in life, and one of them is taxes. No company knows that better than H&R Block, who prepares 15 percent of the tax returns filed in the United States each year. And customers who invest in the company's individual retirement accounts know it's not certain they'll make money. But they do expect the certainty of a fighting chance.

New York Attorney General Eliot Spitzer has filed suit against H&R Block on behalf of 500,000 customers who purchased the company's "Express IRA" in the past four years. The suit alleges that H&R Block failed to disclose account fees that "virtually guaranteed" that investors would lose money. For example, the suit describes how one typical customer with the minimum investment of $300 incurred a $15 set-up fee and a $10 annual maintenance fee for three years. The $45 in fees far outweighed the $10.29 in interest the account earned over the same period. The claim states that H&R Block's fees exceed the interest earned for 85 percent of customers who bought the account.

Some H&R Blocks salespeople actually refused to tell clients about the account because of the fees involved. One district manager took the risk of sending an email to company CEO Mark Ernst in 2002, writing, "Our mission was to help these clients begin a savings plan since many of them had none...I really don't think maintenance fees should exceed the amount of interest that we are paying on these accounts." Yet management failed to address those concerns and continued to hype Express IRA as a good way for low to moderate income people to save for retirement. In a release denouncing the lawsuit, Ernst said, "We believe in the Express IRA product and are proud of the opportunities it presents for our clients."

Consistency between an organization's stated values and its leaders' actual behavior is critical to credibility. When leaders promote a product as beneficial to customers, and then dupe those customers out of their investments, employees immediately and rightly recognize those leaders as frauds. And organizations that tolerate unethical behavior will find the resulting employee turnover very taxing. Bookmark this post on del.icio.us