Medical debt is a growing problem in the United States. Compounding this growing issue is a trend of deceptive medical credit card practices, an issue we spoke about just two months ago. Now it has come to light that one of the largest medical credit card issuers, GE CareCredit, is on the hook for a $34 million refund to its customers. Below weâ€™ll explain the details of this refund and highlight other important information about medical credit cards.
Deceptive Medical Credit Card Practices
According to a recent article in Forbes, CareCredit, the largest issuer of healthcare financing in the U.S., has been targeted in a crackdown by the CFPB and is required to refund its customers up to $34.1 million. Why the crackdown? Deceptive credit card practices.
CareCredit is a card issued by GE specifically for medical costs and is disbursed by doctor and dentist offices across the U.S. The problem is, patients signing up for these cards donâ€™t always know what theyâ€™re getting into, for a variety of reasons including:
The cards being issued by medical office staff rather than a CareCredit representative
The cards being issued at a time when a consumer is vulnerable, scared, and may feel they have no other way to pay for their medical costs
Some consumers never receiving copies of the credit card agreements after signing up, thus leaving them without the ability to read about the terms and conditions they signed for
CFPBâ€™s Action to Provide Better Clarity for Consumers
The CFPB isnâ€™t just acting to help past consumers whoâ€™ve already signed up for medical credit cards through CareCredit. Theyâ€™ve also released a set of requirements that will ensure clarity for future consumers.
From now on, when a consumer signs up for a CareCredit card at the medical office, CareCredit is required to contact the consumer within 72 hours to give verbal explanation of what the consumer just signed up for. And if the initial transaction is over $1,000, the consumer may need to sign up through a CareCredit representative directly instead of through the medical office staff.
These new actions will ensure that consumers who do opt in to these credit cards will receive the information they need to make sure the cards donâ€™t become a detriment to their finances.
What You Should Know About Medical Credit Cards
To further the CFPBâ€™s efforts to make consumers aware of what theyâ€™re getting into with medical credit cards, letâ€™s talk about what this all means to you.
If youâ€™re a current CareCredit card holder:
Right now there is no action for you to take, as CareCredit is required per the CFPB to notify all customers who are eligible for a refund. However, if you want to find out proactively, it canâ€™t hurt to call their customer service line to see if youâ€™re eligible.
If youâ€™re thinking of signing up for a medical credit card:
Of course we think itâ€™s best to avoid debt â€“ any kind of debt â€“ as much as possible. However, medical costs are skyrocketing and you may find yourself in a position in which you need to use a medical credit card. Besides building up an emergency fund for situations like this, the best course of action is to weigh your options carefully before you sign up for anything.
If your medical office isnâ€™t willing to work out a payment plan and/or you feel that theyâ€™re giving you the hard sell on a credit card, consider walking away or seeking alternatives. If you havenâ€™t yet received the care and it can wait until you see another doctor or dentist, then you may find someone whoâ€™s more willing to work with you.
This recent action is just one of many the CFPB has been taking to crack down on practices which could be deceitful or harmful to consumers. As always, if you feel that youâ€™ve been a victim of such practices, submit a complaint â€“ the CFPB will review it and you could end up bringing to light an issue thatâ€™s been harmful to others as well.
Image Credit:Â SalFalko
This post was published by Shannon, Community and Customer Support Manager for Â»Â ReadyForZero.
ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.Download