CareCredit Under Fire & Veterinarians’ Responsibilities

What happens when promised peace of mind leaves consumers feeling misled, deceived, and in debt? 

GE Capital’s CareCredit, the go-to for healthcare financing, is under scrutiny.  Founded 26 years ago, it is used today by about 160,000 healthcare providers nationwide (Yahoo News).  A credit card created solely for medical expenses (human and veterinary) speaks volumes when furry family members need a pricey medical procedure (that might otherwise be unaffordable).

The three-year investigation by the New York General’s office, along with last month’s settlement, may be changing things in the veterinary industry. As Michael Virtanen of Associated Press clarified, “Consumers complained [they believed] they were signing up for a no interest payment plan directly with their provider, and others thought their information was being used to check their credit worthiness only … Some people said they were surprised they had signed up for a credit card, which they received days later.”  (American Banker)

Under the settlement:

• Consumer Protection will be added to CareCredit.
• No transaction exceeding $1,000 will be charged on a CareCredit card within three days of an application.
• Doctors must limit advance charges—and clearly explain card terms (and the higher interest rates that ensue if payments are not satisfied by the ends of promotional periods).
• CareCredit “will not give kickbacks, rebates, compensation, or in-kind services” to any health care provider in exchange for its success in generating card business.

Consumer specialist Rita Robinson reported that “The New York Attorney General’s Office estimates that the appeals process may result in refunds or credits of up to $2 million to about 1,000 consumers whose complaints to GE or CareCredit were rejected.” (The Survive & Thrive Boomer Guide)

Some veterinarians have decided to reject the card. Whether they want to dissociate from a business that may be viewed as corrupt, or put an end to significant commissions they have been paying to CareCredit, one thing is certain. There is growing attentiveness and discussion surrounding this form of veterinary payment. Dr. Ebalinna Vaughn, owner of Best Friends Animal Clinic in Marshall, VA, received a phone message from CareCredit last month alerting her to the fact that they need to review her “compliance” with the recent settlement changes and “that clinic staff needs to be retrained.”

“I still have the [CareCredit] machine sitting up front but we’re not running any sales through it; it’s essentially gathering dust,” she advised. (VIN News Service)  

And according to reporter Edie Lau (VIN), Dr. Vaughn isn’t the sole veterinarian expressing concern:

“Several veterinary clinic owners and managers told the VIN News Service that they’re thinking about parting ways with CareCredit. They may not be the only ones. According to reports by Reuters and Bloomberg, GE Capital is looking to sell the unit. Williams called the reports rumor and declined to comment.” (VIN News Service)

It will be interesting to see how the settlement affects veterinary practices across the country as they consider:

• Their new responsibility to clarify the terms of the card to their clients. Should consumer financial education be a veterinarian’s forced responsibility?
• Now having to train office staff so that they, too, are savvy about card conditions (and, in turn, competent to educate clients)—when failure to comply means termination or disciplinary action. Is it fair to have to pull staff away from clinic responsibilities for this?
• Future dealings with the complaint process (and their role in having to produce signed receipts and documents, which will undoubtedly cut into medical duties).

And ultimately, will CareCredit’s established standing in the veterinary community (as reflected through American Animal Hospital Association (AAHA) and the New York State Veterinary Medical Society (NYSVMS) endorsements) remain intact?

What are your thoughts?

~Carol S. Rothchild

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