GE Capital Retail Bank, CareCredit
Enforcement, Add-On Products, Credit Cards
In December 2013, the CFPB issued a consent order to GE Capital Retail Bank and CareCredit, GE’s credit card group, for misleading customers “about the potential costs of relying on a deferred-interest plan to pay their medical bills.” The CFPB alleged that GE “exploited consumers by not taking adequate steps to ensure they understood the terms of the credit cards that they obtained to help cover the costs at doctors and dentists around the country.” Specifically, “patients who signed up for a credit card to pay for braces or eye surgery were given no warning of the high fees tied to the loans and racked up thousands of dollars in debt as a result.” GE Capital Retail Bank was ordered to refund $34.1 million to “more than 1.2 million CareCredit customers who have incurred credit card penalties and fees since 2009.”
The CFPB claimed, “in many instances, health providers told patients that the CareCredit cards would provide interest-free financing for a year.” However, “the charges could only be avoided if the entire amount was paid within a year after the charge. If an outstanding balance remained at the end of the one-year grace period, interest accruing at a rate of nearly 27 percent was then tacked on to the bill.” [“GE’s CareCredit card to refund $34 million to customers,” Associated Press, 12/10/13]
As part of the agreement, GE will reimburse the “more than 1.2 million CareCredit customers who have incurred credit card penalties and fees since 2009.” CareCredit also “must create new disclosures with a detailed description of the deferred-interest product and give consumers advance notice of the expiration of the promotional period. Patients must also be enrolled directly through a CareCredit representative, not through the office staff of a doctor or dentist, for transactions over $1,000.” [Danielle Douglas, “Consumer bureau hits medical financing company CareCredit with $34.1 million action,” The Washington Post, 12/10/13]
Inactive or Resolved
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