The Consumer Financial Protection Bureau announced Tuesday that General Electric Co.’s credit card division will refund $34.1 million to consumers who were misled about healthcare credit cards. This decision affects more than 1 million people who obtained CareCredit cards from GE Capital Retail Bank since 2009.
Consumers say that these credit cards were marked as interest-free, but in reality, the cards accrued interest at a rate of 26.99% on all the balance, even on that which had already been paid off during the promotional period. These deferred-interest credit cards were sold at over 175,000 offices of doctors and dentists around the country. Many patients did not receive any paperwork regarding the cards and were completely unaware that they would have to pay interest on the charges. After receiving hundreds of complaints from consumers, the Consumer Financial Protection Bureau looked into the company. General Electric was finally ordered to refund the $34 million and improve its disclosure to consumers. Furthermore, they were asked to have a well trained and informed staff that markets the cards realistically to consumers.
As we have warned before, deferred interest credit cards can be dangerous to consumers. This case caused a lot of uproar, but not all consumers can get their money refunded. So do your research and read the fine print before you get a deferred interest credit card!
