GE settles with N.Y. over high-rate healthcare credit card

Mon Jun 3, 2013 3:17pm EDT
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By Jonathan Stempel

(Reuters) - General Electric Co (GE.N: Quote) has reached a settlement with New York's attorney general to end a probe into whether consumers were pressured into using a health care credit card carrying a high interest rate.

The settlement with GE Capital Retail Bank and its CareCredit LLC unit adds protections for patients, including some who were charged a rate as high as 26.99 percent on their CareCredit cards, the attorney general Eric Schneiderman said.

CareCredit's network includes about 170,000 providers, and Schneiderman called it the largest issuer of consumer health care financing in the nation.

The accord resolves part of a probe announced in August 2010 by Schneiderman's predecessor, Andrew Cuomo, into whether high-pressure sales tactics and other healthcare lending practices 'were driving seniors and lower-income patients deeper into debt.

GE and 10 healthcare providers had been subpoenaed by Cuomo, who is now New York's governor.

Schneiderman said about 65 percent of CareCredit cardholders apply for the card while in their doctors' offices, when the application process can be rushed.

He said many thought they had been signing up for no-interest payment plans directly with their medical providers.

Monday's settlement helps stop providers "charging large, upfront fees for future services and from glossing over the huge interest rates associated with CareCredit when promoting the credit card to patients," Schneiderman said.   Continued...