Attorney General Cuomo Launches Industry-wide Investigation Into Predatory Health Care Lending That Is Pushing Consumers Nationwide Into Debt

NEW YORK, NY (August 4, 2010) – Attorney General Andrew M. Cuomo today announced an industry-wide investigation into predatory health care lending where consumers, especially seniors and vulnerable patients, are misled about financing, causing them to be pushed into debt.

An investigation by Attorney General Cuomo found that some health care providers pressure consumers into using GE Money’s CareCredit, a health care credit card, through fast-talking sales pitches and deceit. The investigation also found that CareCredit often pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.

The investigation was based in part on hundreds of consumer complaints received by the Attorney General’s Office. Consumers reported that health care providers promised that the credit card had “no interest,” when it often carried retroactive interest of over 25 percent if not paid in full during a promotional period. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored. Meanwhile, CareCredit pays the health care providers in-full within 48 hours of the charge.

The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. This kickback arrangement, plus CareCredit’s payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment. In fact, providers pushed CareCredit over cash.

“Health care debt is the number one cause of individual bankruptcy, and this scheme is contributing to the economic burden being felt by consumers,” said Attorney General Cuomo. “People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about – and they are ignored and given the runaround when they try to get their money back.”

Cuomo issued subpoenas to 10 providers that promote CareCredit, as well as to the companies that manage CareCredit, Chase Health Advance, Visa Health Benefits, and Citibank Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints, and regulatory inquiries. This investigation is ongoing.

In addition, Cuomo is asking several nationwide and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why they endorsed CareCredit and whether they received compensation for doing so. 

CareCredit is accepted by more than 125,000 health care practices nationwide. The New York State Dental Association asserts that more than 8 million dental patients and 80,000 dental practices use CareCredit nationwide. The credit card is advertised as a way to pay for services often not covered by insurance, including:

  • Chiropractic procedures
  • Cosmetic procedures
  • Dental procedures
  • Infertility treatment
  • Hearing procedures
  • Vision procedures
  • Weight loss procedures
  • Veterinary services

In recent years, Attorney General Cuomo’s Office received hundreds of complaints from consumers indicating that they were lured and misled by providers into applying for, accepting, and using CareCredit. Among the complaints received by the Attorney General’s Office regarding the scam: 

  • A Williamsville resident went to a dental provider with a toothache and was told he needed $9,000 in work done. He told the practice’s office manager that he had the ability to pay for the service in cash, but he was still persuaded to sign up for financing through CareCredit. He ended up having the work done elsewhere, but the full amount of charges was billed to his card, despite receiving no services from the practice.
  • An Onondaga County woman was told by a dental practice she needed a variety of procedures, and to get them she would have to sign a CareCredit agreement. After only having one $400 procedure done, which she paid for, she received a bill for $2,600. Her attempts to get a refund were rejected by both the provider and CareCredit.
  • An Oswego woman was given a $6,000 estimate for dental procedures. She was urged to sign up for CareCredit, and was told this was an interest-free, monthly payment plan. However, she was charged up-front before the procedures were done, plus interest.
  • A Monroe County man signed up for CareCredit to pay for an estimated $5,600 in services from his provider, but it was not made clear he was agreeing to a credit card. He left the medical office and sought treatment elsewhere, but continued to receive bills from CareCredit, which insisted he was delinquent on payments, resulting in a negative credit report and the reduction of his other lines of credit.
  • A Syracuse-area consumer was told by his chiropractor that he needed two years of treatment and he was signed up for a CareCredit card without his consent. He was charged $3,000, which CareCredit refused to rescind. When the consumer switched to a different provider because the treatments at his chiropractor worsened his condition, the practice refused to release his medical records, claiming he still owed them money. 
  • A woman from Tioga County went to a provider where an application to CareCredit was “thrown in (her) face.” No other financing options were offered to her, and she was charged $5,000 for a procedure that failed multiple times and for which another provider later charged only $1,200.

Chuck Bell, Programs Director for Consumers Union, nonprofit publisher of Consumer Reports, said, “Attorney General Cuomo’s investigation shines a badly-needed spotlight on deceptive practices used to market health care credit cards to elderly and low-income consumers. We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds. Consumers Union strongly supports the Attorney General's investigation, and applauds his ongoing efforts to protect consumers across the nation.”

Catherine Dunham, President of The Access Project, a resource center for local communities working to improve health and health care access, said, “With the cost of health care already an enormous burden on Americans, we must do everything we can to filter out abusive or deceptive practices in how providers take payment for care. Attorney General Cuomo’s investigation into health care credit cards will help protect millions of patients across the country who are struggling with debt. We applaud his efforts and look forward to continuing to partner with him to protect patients.”

Consumers wishing to file complaints regarding deceptive health care credit card practices are urged to contact the Attorney General’s Office at or 800-428-9071. Consumer tips and more information about the investigation, including an example of the letters sent to trade groups, can be found online at

The investigation is being conducted by Assistant Attorney General Carol Hunt of the Health Care Bureau under the supervision of Executive Deputy Attorney General for Social Justice Mylan Denerstein and Special Counsel to the Attorney General Linda A. Lacewell. 

Subpoenas to Health Care Providers:

  • Allcare Dental Management Inc. - Buffalo
  • American Laser Centers - Farmington Hills, MI
  • Aspen Dental Management, Inc. - East Syracuse
  • East Syracuse Family Dental Arts - East Syracuse
  • Laser Cosmetica - New York City
  • Lifestyle Lift - Troy, MI
  • Northern Lights Chiropractic - Watertown
  • S & Y Diamond Dental P.C. - Brooklyn
  • Sunshine Dental - Watertown
  • Toothsavers - New York City

Letters to Groups Endorsing CareCredit: