The Consumer Financial Protection Bureau has ordered GE Capital Retail Bank to refund $34 million to customers it misled into signing up for its CareCredit medical credit cards.
Medical credit cards such as CareCredit offer no interest for the first six months but if consumers don't pay in full by then, they are up to 27 percent interest, retroactively.
Consumers are being deceived by doctors and dentists who offer the cards, said Ed Mierzwinski, federal consumer program director for the advocacy group U.S. PIRG.
"Somebody you're expecting to provide you with treatment steps in and acts as your bank and you just think, oh, they're here to help me," he said. "You're shopping for health care, you're not shopping for credit, and that's what the CFPB's message is here today."
"We have had clients tell us they received no information at the time they enrolled," said Kerry Smith, an attorney for Community Legal Services in Philadelphia. "In many cases clients thought they were actually in a payment plan with the provider itself."
The CFPB decision will send a message, Mierzwinski said.
"It's very clear to me industry lawyers are watching the CFPB, watching its enforcement tactics, and when it does take an action, they will send letters to their clients and they will say if you are doing any thing like what GE Capital was doing, don't do it any more," he said.
Four million consumers hold active CareCredit cards, which are offered by 175,000 providers.
