Springstone Financial, in Massachusetts, will pay $700,000 in restitution to victims for allegedly deceiving them through one of their lending programs, said the Consumer Financial Protection Bureau (CFPB) on Aug. 19.
The bureau said the company led customers to believe that loans they took out to pay for dental work was interest free. However, interest was accruing from the start of the customers’ purchase, and was charged if the balance wasn’t paid in full before the promotional period expired.
The CFPB said about 3,200 customers who signed up for the lending program were charged the deferred interest.
“Deceiving patients in need of medical care into paying for services with risky credit adds insult to injury,” said CFPB Director Richard Cordray. “The bureau will not tolerate financial companies or their providers taking advantage of distressed patients and their loved ones with misleading sales pitches.”
The health care lending program ran between January 2009 and December 2014, according to an investigation by the CFPB. The investigation revealed that those who were trained to market the deferred loan program were misleading customers about the interest that they could accrue if the balance was not paid on time.
Dental office staff told some customers the program was “interest free,” however interest rates were as high as 22.98 percent if not paid during the promotional period, Cordray said.