WASHINGTON (12/11/13)--A credit card issuer big in the niche market of credit card enrollments at doctors' and dentists' offices around the country is being ordered by the Consumer Financial Protection Bureau to refund up to $34.1 million to consumers because of alleged deceptive enrollment tactics.
The CFPB announcement Tuesday said GE Capital Retail Bank through its subsidiary, CareCredit, has been engaged in "harmful consumer practices" since January 2009 and that the bureau came to the case after receiving substantial complaints from consumers.
CareCredit, according to the CFPB, is offered by more than 175,000 enrolled providers across the country. Receptionists, office managers, and office staff sell it to patients when they are paying for their medical care, waiting to see the doctor or dentist, or sometimes in between treatments.
"Our investigation showed that many patients thought they were signing up for an interest-free loan. Or they may have thought they were signing up for an in-house payment plan with their doctor. But the card was really a 'no interest if paid in full' product that is a much trickier deal," CFPB Director Richard Cordray said. "While the arrangement guarantees that the health-care provider gets paid, patients sometimes end up with huge credit card bills they cannot afford."
The CFPB estimates that more than 1.2 million consumers were wronged and could be eligible for money from the reimbursement fund. In the future, CareCredit will be required to be more transparent to consumers about its product.
Cordray said, "When people seek medical care, they are in a particularly vulnerable situation….So it is particularly important that a credit card company offering personal lines of credit to pay for health care is doing everything to the letter of the law--that they are treating people fairly, with dignity, and with the utmost transparency."