N.Y. Attorney General Andrew M. Cuomo has reported on an ongoing industry-wide investigation into predatory healthcare lending where consumers, especially seniors and vulnerable patients, are “misled about financing,” which particularly targets GE Money's CareCredit.
The AG’s office said the investigation found that some healthcare providers pressure consumers into using GE Money's CareCredit, a healthcare credit card, through “fast-talking sales pitches and deceit. The investigation also found that CareCredit often pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.”
Hundreds of consumers reported that healthcare providers promised that the credit card had "no interest," when it often carried retroactive interest of more than 25 percent if not paid in full during a promotional period, according to the AG’s office.
Consumers also were “unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored,” says Cuomo. "Meanwhile, CareCredit pays healthcare providers in-full within 48 hours of the charge."
The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generate through CareCredit sales.
"This kickback arrangement, plus CareCredit's payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment," wrote the AG's office, in a statement released Aug. 4. "In fact, providers pushed CareCredit over cash."
Cuomo issued subpoenas to 10 providers that promote CareCredit, as well as to the companies that manage CareCredit, Chase Health Advance, Visa Health Benefits and Citibank Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints and regulatory inquiries. CareCredit is accepted by more than 125,000 U.S. healthcare practices.