NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Monday with GE Capital Retail Bank and its subsidiary to provide protections for consumers who used a high interest healthcare credit card.
GE Capital Retail Bank and CareCredit LLC signed contracts with healthcare providers who offered the card to patients as a way to finance the cost of treatment. Schneiderman's Health Care Bureau alleged that the CareCredit application process was often rushed and high-pressure and that many providers failed to inform consumers of the basic terms of the card, which included a retroactive interest of 26.99 percent if not paid in full during a promotional period.
Schneiderman's office received hundreds of complaints related to CareCredit.
"The explosion of medical credit card debt is a major concern for many New Yorkers, particularly low and middle income households and vulnerable seniors," Schneiderman said. "The problem is made even worse by those who encourage high-pressure sales tactics in our health care settings and companies who charge outlandishly high interest rates. This agreement will help New Yorkers by stopping providers from charging large, upfront fees for future services and from glossing over the huge interest rates associated with CareCredit when promoting the credit card to patients."
Under the terms of the agreement, GE Capital Retail Bank and CareCredit LLC will provide a cooling-off period to let consumers consider the card's terms and treatment plan, transparency disclosures to make consumers aware of high interest rates and a limit to what the provider can charge in advance.
GE and CareCredit comprise the largest issuer of consumer healthcare financing in the U.S. with approximately 160,000 providers offering the service.
Schneiderman's Health Care Bureau estimates the appeals process could lead to up to $2 million in credits or refunds for approximately 1,000 consumers.