New York Attorney General Andrew Cuomo launched a probe of CareCredit, a division of General Electric Co.'s GE consumer finance unit for misleading users on the terms of its healthcare credit card, the Rochester Democrat and Chronicle reports.
Cuomo issued subpoenas to the GE unit and 10 health-care service providers as part of a predatory lending investigation, he said. Many doctors and other health care providers receive a commission for signing patients up for the program, the Press & Sun Bulletin reports. Some providers pressure consumers into using the card and are rewarded with "kickbacks" in the form of rebates, Cuomo said in a statement.
"People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about--and they are ignored and given the runaround when they try to get their money back," Cuomo said.
Cuomo's office 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. The kick back arrangement, plus CareCredit's full payment to providers within two days of the charge gives providers an incentive to push consumers to use CareCredit rather than other forms of payment, even cash.
The CareCredit card is advertised as a way to pay for services often not covered by insurance, including chiropractic procedures, cosmetic procedures, dental procedures, vision, weight loss, and infertility treatments.
Cuomo subpoenaed 10 providers that promote CareCredit and is asking several national and state-based medical associations, including the American Dental Association and the New York State Dental Association to explain why they endorsed CareCredit and whether they received compensation for doing so.
CareCredit is accepted by more than 125,000 healthcare practices nationwide. Some 80,000 dental practices and more than 8 million dental patients use CareCredit nationwide, according to Cuomo.
To learn more:
- read the New York Attorney General's press release
- read the Press & Sun Bulletin article
- see the Rochester Democrat and Chronicle article
- here's the the Businessweek article