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Predatory health care lending probe under way

Andrew Cuomo

New York State Attorney General Andrew M. Cuomo’s office is investigating predatory health care lending.

Speaking Thursday at the Don W. Cook Senior Center in Henrietta, Cuomo said the practice involves misleading consumers, especially seniors and vulnerable patients, about financing, causing them to be pushed into debt.

He said his investigation found some health care providers pressured consumers into using GE Money’s CareCredit, a health care credit card, through fast-talking sales pitches and deceit. The investigation also found that CareCredit often pays kickbacks in the form of rebates to providers based on how much business consumers charge on CareCredit cards, advertised as a way to pay for services typically not covered by traditional insurance

The investigation was based in part on consumer complaints received by the attorney general’s office. Cuomo said many consumers reported that health care providers promised the credit card had “no interest,” when it often carried retroactive interest of more than 25 percent if a balance was not paid in full during a promotional period.

Consumers also reportedly were unknowingly charged up front for services they never received, and attempts to obtain refunds often were thwarted or ignored.

The investigation found CareCredit charges providers a fee for the right to offer the cards, then rebates part of the fee based on the amount of money providers generated through card sales. The 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. In fact, providers pushed CareCredit over cash, according to Cuomo’s office.

Subpoenas were issued to 10 providers that promote CareCredit and Cuomo has asked several national and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why CareCredit was endorsed and whether received compensation was provided for doing so.

Consumers who wish to file complaints regarding deceptive health care credit card practices are urged to e-mail [email protected] or call 1 (800) 428-9071. Consumer tips and more information about the investigation, including an example of the letters sent to trade groups, may be found online at