Lori Swanson (D)

ST. PAUL, Minn. (Legal Newsline) - Minnesota Attorney General Lori Swanson has filed a lawsuit against a chiropractic clinic that allegedly enrolled patients in health care credit card programs without their consent.

Okeson Optimal Chiropractic clinic of Lakeville and its owner, Erik Okeson, would inflate the actual incomes of the patients and usurp the identities of unrelated third parties who would then be listed as co-applicants without their knowledge to secure health care credit cards, the attorney general has charged.

The lawsuit against the clinic and its owner alleges that they fraudulently enrolled patients in CareCredit health care credit cards that were issued by GE Money Bank, the nation's largest issuer of health care credit cards.

"By listing unsuspecting strangers as co-applicants on other patient's credit cards and inflating patients' real income, the clinic jeopardized patients' credit histories and obligated patients to repay credit card bills on lines of credit for which they otherwise may not qualify," Swanson said. "The clinic wanted patients to qualify for these credit cards so it could pre-bill the cards and make money."

Co-applicant information obtained when they would provide their name and Social Security number to the defendants as part of an initial health screening. The co-applicants did not consent to being co-applicants were not made aware of this status. The co-applicants also did not know the primary applicant.

To ensure that the primary applicants qualified for credit, the defendants submitted false and grossly inflated annual income to CareCredit in some cases. By inflating the patients' income, the patients were obligated to repay credit card bills on lines of credit for which they would otherwise not qualify.

The patients' CareCredit credit cards would be pre-billed in amounts ranging from $1,200 to $4,300 prior to services being delivered. From June 2007 through July 2009, charges of $632,000 were placed by defendants on credit cards issued to their patients by CareCredit. Default interest rates of up to 29.99 percent were applied to the credit card if the amount charged was not paid back on time.

The practice of selling health care credit cards to patients has become more prevalent in recent years to capitalize on rising health care costs and gaps in insurance coverage. A report by McKinsey & Company estimates that approximately $45 billion a year in out-of-pocket medical expenses are charged on credit cards.

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