GE unit to reimburse consumers misled over credit cards

Reuters

By Aruna Viswanatha

WASHINGTON, Dec 10 (Reuters) - The U.S. consumer financialwatchdog on Tuesday ordered a General Electric Co unit torefund up to $34.1 million to customers who it said were misledabout healthcare credit cards.

The Consumer Financial Protection Bureau said GE CapitalRetail Bank's CareCredit unit signed up consumers for creditcards that were marketed as interest-free. Actually, the cardsaccrued interest that could kick in at the end of a promotionalperiod.

CareCredit, which offers personal lines of credit forhealthcare needs, did not immediately respond to a request forcomment.

The credit cards, sold at some 175,000 offices of doctorsand dentists around the country, accrued interest at a rate of26.99 percent that was charged to the borrower in full if therewas any balance on the card at the end of a promotional period,regulators said.

Many patients did not receive any paper copy of the creditcard agreement but instead relied on staff at healthcare officeswho were themselves sometimes confused about the terms of thecards, the regulators said.

"Deferred-interest products can be risky for consumers inthe best of circumstances, and today's action ensures thatCareCredit will no longer profit from consumer confusion," CFPBDirector Richard Cordray said in remarks to reporters.

The agency said it began looking at the company afterreceiving hundreds of complaints from consumers.

The CFPB recently flagged deferred-interest products as aparticular area of concern because customers often confuse themwith credit cards that offer low introductory rates.

Under the terms of the order, CareCredit agreed to improveits disclosures to consumers and its training of staff thatmarket its cards.

About one million borrowers may be eligible for a refund,the agency said.

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