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Debt relief coming for patients duped by CreditCare practices

Wouldn't you trust your doctor to set up a payment plan for your medical bills? Scores of patients throughout Washington and the rest of the nation did, but they faced almost certain financial ruin after accepting terms from the CareCredit initiative provided by many physicians. Now, victims of that scheme may be able to access debt relief money, which will compensate them for the deceptive practices used by the medical loan agency.

Investigators say that CareCredit, often used to fund eye surgery and braces, never told patients about high loan fees associated with their products. Consequently, about 1.2 million consumers were duped into accumulating thousands of dollars in unnecessary debt. The Consumer Financial Protection Bureau ordered the company to repay $34.1 million to its consumers, most of whom have incurred the penalties since 2009.

Among the major allegations in the case was that CareCredit did not get directly involved in the lending process, instead relying on physicians, dentists and even receptionists to explain financing terms. Many patients thought, therefore, that they were enrolling in an in-house payment plan with fair terms. Instead, they were signing up for deferred-interest financing, a financial product that is often criticized for its unfair terms. Patients would pay the principal costs during a six- to 24-month promotional period, but they were then subject to very high interest rates on the remaining balance after that time.

Government officials say that CareCredit took advantage of those who were seeking essential medical care. Patients are not always in the best position to be their own financial advocates, as medical care is an emotional experience. Thus, companies with health care financing must be sure to provide transparent, dignified and fair terms for their consumers.

Washington victims of such health care credit practices may be entitled to financial compensation for their existing medical debt. This compensation might even allow for repayment of debt or prevent foreclosure, in some instances. A qualified bankruptcy attorney can help those with medical debt understand more about their legal options after this CareCredit judgment.

Source: dailylocal.com, "CareCredit faces $34.1 million action over enrollment practices" Danielle Douglas, Dec. 13, 2013

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