Dive Brief:

• Some consumers have felt pressure to use medical credit cards provided by doctors, dentists or hospitals, and don’t fully understand the terms of those financing tools, the Consumer Financial Protection Bureau said last Tuesday in an update on its effort to boost oversight in the area.
• Consumers have complained about healthcare providers misrepresenting the terms of promotions associated with the cards, particularly with respect to deferred interest, and not making clear when payments would be allocated to their balances, the CFPB’s July 2 supervisory update said.
• “At one entity, examiners identified a significant number of consumer complaints regarding how dentists and other healthcare providers promoted, offered and sold medical credit cards to consumers,” the CFPB’s Supervisory Highlights report said.

Dive Insight:

The CFPB issued the report after putting healthcare providers on notice last year that it would be drilling down into the ways they are extending medical credit card offers to patients as a part of an effort to safeguard consumers in the healthcare economy. It’s part of a broader effort by the Biden Administration to police financial services in the healthcare realm.

Last July, the CFPB said it would team with the Department of Health and Human Services and the Treasury Department to seek more information about healthcare lending tools in the interest of boosting regulation in the arena. The campaign follows on evidence of consumers being inappropriately steered to higher-cost options.

The findings in the latest CFPB report are from examinations the federal agency completed between April 1, 2023 and December 31, 2023. In reviewing the healthcare payments products and the healthcare providers communications with customers, the CFPB’s examiners said the materials didn’t offer enough information to allow them to assess the programs’ adequacy. 

The CFPB’s supervision division “plans to continue to assess entities’ oversight of medical providers, including whether the oversight is commensurate to the risks in the product offering,” the agency’s update last week said. “Additionally, Supervision intends to monitor the incentives entities offer to enroll patients in specific products and marketing materials about the products.”

From 2018 to 2020, consumers paid $1 billion in deferred interest payments on healthcare credit cards and loans, according to a May 2023 CFPB report. During that period, consumers used credit cards and loans to pay nearly $23 billion worth of healthcare costs ranging from emergency room visits and medications to dental and vision care. 

Wells Fargo, Synchrony Financial subsidiary CareCredit and Bread Financial subsidiary Comenity are the top companies offering medical credit cards, according to the CFPB.