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

NEW YORK, NY (August 9, 2010) - Attorney General Andrew M. Cuomo today announced the expansion of 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 use fast-talking sales pitches to pressure and deceive consumers into applying for health care credit cards such as Chase Health Advance, Citi Health, and GE Money’s CareCredit. The investigation also found that CareCredit 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, the credit card companies typically paid 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.

“Our ongoing investigation has uncovered conflicts of interest and predatory practices in the health care industry that are hurting New Yorkers and patients across the country,” said Attorney General Cuomo. “Patients are being misled into paying for services they never received by the people they should be able to trust the most - their doctors. Doctors are supposed to represent patients, not credit card companies, no matter what kind of kickbacks they are offered.”

Cuomo issued subpoenas to 14 dental and health care clinics that promote CareCredit, as well as to GE’s CareCredit, Chase Health Advance, and Citi 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 health care credit cards. Among the complaints received by the Attorney General’s Office regarding the scam:

  • A Nassau county woman went to a dental provider covered by her insurance for a root canal. The dentist told her that she had serious dental problems and needed $14,000 worth of work. When the consumer told the dentist she could not afford $14,000, the dentist said he would not do the root canal unless she applied for CareCredit. The following day, the consumer received a bill for $13,900 even though none of the work was performed.
  • An elderly Brooklyn resident was advised by her dentist that she needed extensive dental work. The consumer agreed to allow the dentist to check her credit. A few days later, she received a bill from CareCredit for $6980. No dental work was performed.
  • A Bronx resident had $17,500 worth of implants charged to a CareCredit account up front by a dental provider. The provider went out-of-business before completing the work. CareCredit repeatedly refused the consumers requests to refund the money.

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 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
  • Gentle Dentistry - East Aurora
  • Judd Lesser, DDS - Hewlett
  • Concerned Dental Care of Westchester P.C.
  • Bernie Fialkoff DDS - Queens

Letters to Groups Endorsing CareCredit: