General Electric Co has reached a settlement with New York's attorney general to end a probe into whether consumers were pressured into using a health care credit card carrying a high interest rate.
The settlement with GE Capital Retail Bank and its CareCredit LLC unit adds protections for patients, including some who were charged a rate as high as 26.99 percent on their CareCredit cards, the attorney general Eric Schneiderman said.
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CareCredit's network includes about 170,000 providers, and Schneiderman called it the largest issuer of consumer health care financing in the nation.
The accord resolves part of a probe announced in August 2010 by Schneiderman's predecessor, Andrew Cuomo, into whether high-pressure sales tactics and other healthcare lending practices 'were driving seniors and lower-income patients deeper into debt.
GE and 10 healthcare providers had been subpoenaed by Cuomo, who is now New York's governor.
Schneiderman said about 65 percent of CareCredit cardholders apply for the card while in their doctors' offices, when the application process can be rushed.
He said many thought they had been signing up for no-interest payment plans directly with their medical providers.
Monday's settlement helps stop providers "charging large, upfront fees for future services and from glossing over the huge interest rates associated with CareCredit when promoting the credit card to patients," Schneiderman said.
GE Capital spokeswoman Dori Abel said the company has cooperated with the probe, and refunds to cardholders whose complaints had previously been rejected should be "substantially lower" than the maximum $2 million that Schneiderman estimated.
The settlement also requires GE Capital and CareCredit to enhance disclosures, improve training and complaint resolution, and let patients object to charges above $1,000 that are incurred within three days of their initial applications.
A spokeswoman for Schneiderman had no immediate comment on other parts of the probe. GE is based in Fairfield, Connecticut.
(Reporting by Jonathan Stempel in New York; editing by Andrew Hay)