By Aruna Viswanatha
WASHINGTON Dec 10 The U.S. consumer financial
watchdog on Tuesday ordered a General Electric Co unit to
refund up to $34.1 million to customers who it said were misled
about healthcare credit cards.
The Consumer Financial Protection Bureau said GE Capital
Retail Bank's CareCredit unit signed up consumers for credit
cards that were marketed as interest-free. Actually, the cards
accrued interest that could kick in at the end of a promotional
CareCredit, which offers personal lines of credit for
healthcare needs, did not immediately respond to a request for
The credit cards, sold at some 175,000 offices of doctors
and dentists around the country, accrued interest at a rate of
26.99 percent that was charged to the borrower in full if there
was any balance on the card at the end of a promotional period,
Many patients did not receive any paper copy of the credit
card agreement but instead relied on staff at healthcare offices
who were themselves sometimes confused about the terms of the
cards, the regulators said.
"Deferred-interest products can be risky for consumers in
the best of circumstances, and today's action ensures that
CareCredit will no longer profit from consumer confusion," CFPB
Director Richard Cordray said in remarks to reporters.
The agency said it began looking at the company after
receiving hundreds of complaints from consumers.
The CFPB recently flagged deferred-interest products as a
particular area of concern because customers often confuse them
with credit cards that offer low introductory rates.
Under the terms of the order, CareCredit agreed to improve
its disclosures to consumers and its training of staff that
market its cards.
About one million borrowers may be eligible for a refund,
the agency said.