General Electric Co. (GE) reached a settlement with the New York Attorney General’s office resolving an investigation into a GE health-care credit card that charged interest rates as high as 27 percent.
The agreement with GE Capital Retail Bank and CareCredit LLC adds protections for consumers, who were often unaware of the costs, Attorney General Eric Schneiderman said today.
“This agreement will help New Yorkers by stopping providers from charging large, upfront fees for future services and from glossing over the huge interest rates associated with CareCredit,” Schneiderman said in a statement.
Health-care providers offer the card, which is issued by GE Capital Retail Bank, to patients so they can finance treatment, and a majority of customers apply for the card while in the provider’s office, according to the attorney general. CareCredit is the largest issuer of consumer health-care financing in the U.S., the state said.
Consumers complained they were led to believe they were signing up for a no-interest payment plan directly with their provider, and others thought their information was being used to check their credit-worthiness only, according to the state. Some people said they were surprised they had signed up for a credit card, which they received days later.
GE, based in Fairfield, Connecticut, may owe $2 million to about 1,000 consumers whose complaints to the company were rejected, according to the state. GE has agreed to notify them of their right to appeal.
Russell Wilkerson, a GE spokesman, didn’t immediately respond to an e-mail and phone message seeking comment on the settlement.
Under the settlement, GE agreed that no transaction of more than $1,000 will be charged on a CareCredit card within three days of an application. It will also change its contract with health-care providers to ensure they accurately describe the terms of the card.