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GE Capital Retail Bank has been ordered to pay $34.1 million to consumers who were enrolled in their allegedly deceptive CareCredit credit card program.
In December, the Consumer Financial Protection Bureau (CFPB) announced that it ordered GE Capital Retail Bank and its subsidiary, CareCredit LLC, to refund potentially more than 1 million consumers who signed up for CareCredit credit cards under the belief the cards were interest free. In reality, the cards actually accrued interest that was applied if the balance was not paid in full at the end of a promotional period.
“Medical debt is already a big problem for many Americans. Poor credit card transparency should not be making the problem even worse,” CFPB Director Richard Cordray said. “Deferred-interest products can be risky for consumers in the best of circumstances, and [this order] ensures that CareCredit will no longer profit from consumer confusion. The Bureau will not tolerate financial companies that take advantage of patients and their loved ones.”
CareCredit provides personal lines of credit for health care services. It is offered by medical providers and office staff as a payment option for their patients. According to the CFPB, CareCredit is sold by more than 175,000 health care providers across the United States. The CFPB began an investigation into CareCredit after receiving complaints from hundreds of consumers.
The CFPB reportedly found that service providers used deceptive enrollment processes to entice consumers into signing up for the CareCredit credit card. Further, many consumers did not receive physical copies of the CareCredit agreements and depended entirely on the verbal explanations provided by the service provider. Many consumers reportedly believed that the cards were interest free and did not realize they agreed to a deferred-interest credit card with a whopping 26.99 percent interest rate.
The CFPB also found that many of the health care staff responsible for explaining the CareCredit terms to consumers were inadequately trained. Some even admitted to CFPB investigators that they were confused by the deferred-interest credit card agreement.
According to the CFPB, since January 2009, consumers who signed up for CareCredit often were given an inadequate explanation of the credit card’s terms. These consumers reportedly incurred significant debt because they did not know how to avoid deferred interest, penalties and fees.
The CFPB has ordered CareCredit to provide $34.1 million in refunds to consumers who signed up for the credit cards without being properly informed about the terms of the CareCredit agreement. In addition, CareCredit must contact most consumers within 72 hours of the initial transaction to explain the product. Consumers making certain transactions of more than $1,000 must be enrolled by a CareCredit representative and not through a health care provider or office staff member.
More than 1 million consumers are potentially victims of deceptive CareCredit enrollment tactics. A copy of the CFPB’s order requiring GE Capital Retail Bank and CareCredit to refund consumers is available here.
GE Capital Retail Bank and CareCredit are not the first to be subjected to penalties by the CFPB. In April, Bank of America agreed to pay $772 million to settle CFPB’s accusations that it illegally charged consumers for a credit card and monitoring service that they didn’t receive. In September 2013, Chase was ordered to pay $309 million to more than 2 million consumers who were charged for fraud monitoring services they didn’t receive. And in 2012, Capital One and Discover were each ordered to pay at least $200 million in refunds to cardholders who purchased certain credit protection products over the phone, under the assumption the services were free.
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123 thoughts onGE Capital Retail Bank Ordered to Pay $34.1M in CareCredit Refunds
It is awfully disturbing that companies like this get away with capitalizing on a low income consumer’s poor financial state just because they NEED a medical procedure. I would understand the high interest for elective cosmetic procedures but not ones that people can’t live without (or will have a much lower quality of life if they don’t get it). 30% or higher APR should be illegal by now in any case, in my opinion.
Hi After making on time payments to Care Credit I received a whopping charge of nearly $5000 to my account for so called interest. I never agreed this. Please help!
Thank You so much!
This is still going on. I applied at the ER Vet for Care Credit to cover a dying pet in Sept 2022. I was told that I was approved for 2100.00 and that It would be 0% for 2 years and as long as my payments were received timely there would be no interest. I have been charged interest since receiving the 1st bill.
Ann B
Please add my name to the care credit lawsuit
Please add me. I have records of paying off all of my promotional purchases in time, yet I was still charged interest because I didn’t contact them to tell them to specifically apply the payment to the promotion.
Please add me as well! They are still doing the EXACT same thing. I have two cards with them that i opened to pay off $10k in surgery’s. I have been paying this off monthly for over 3 years and my balance is now actually MORE than my original balance. They also signed me up for all kinds of services I NEVER signed up or agreed to (like credit protection for $70 a month!!). What can we do here?!?! They should not be allowed to get away with this!!
I also would love to get on the care credit lawsuit
If there’s another lawsuit, add my name.
Same here.
2020, broke a tooth. Only way to get a dentist to fix it was to use care credit. I was under extreme pain and thus duress. The dentist explained it was interest free if paid within a year. I received no credit card sign up paperwork or a call from care credit. Also I thought this was classified as medical debt. I WAS NOT MADE AWARE THIS WAS ACTUALLY A CREDIT CARD. I am a disabled vet and on a fixed income, also was enrolled in school full time when the debt was accrued. I did make my payments on the initial 2000 dollar loan above the minimum amount required. Towards the end I used the care credit to buy a brace (500 dollars) for my spouse after she broke her back. I continued to pay and was down to 157 owed. When I went to make my last payment suddenly the ammont owed was 1668 dollars. I called and they explained it was balloon interest bc I failed to pay off the debt within a year. However the original debt was paid in full plus majority of the 500 dollars for the brace. It was never explained to me or even remotely obvious that additional charges would trigger a ballon interest payment on all charges ever. Faster than I could say wtf care credit had ballooned through further interest the amount owed up to 2900+. Well in excess of the 157 or the total charges of 2500. This has literally prevented me from buying a house as this tanked my credit score from 770 to 600. They have since sold the debt to midland credit management now I’m getting threatened with legal action from them. Worse yet the information midland credit has available is wrong and fabricated as it doesn’t reflect all my payments and even shows care credit charging me 2 dollars of interest per month. Which is wrong 100% false. They also reported the my account balance as 1668 at the time of my last payment which is also 100% false. This company is predatory and should be dissolved.
Is there any way to still recover funds from this company? They’re still doing the same thing. The phone number they give to call has an automated message to call another number and that gives a busy signal
One procedure but two promotions. Very confusing! Interest rate goes up and down! Customer service is ridiculous.!
I’m interested too. This should be illegal! Recently I charged a dental procedure and it was under promotional category when I logged into my account and didn’t have a deadline date when it should be paid. Called Care Credit and they said the charges didn’t meet the promotion. Now they are charging me monthly interest.