Investigation on predatory-lending practices
On Monday New York Attorney General Andrew Cuomo said that subpoenas have been issued to units of J. P. Morgan Chase & Co. and Citigroup Inc. as part of an investigation which is underway into alleged predatory-lending practices involving health-care credit cards.
Cuomo had stated last week that subpoenas were sent to many health-care providers in the area it was also sent to General Electric Co.'s GE Money unit over its CareCredit health-care credit-card program.
Fast-talking sales pitch was being used by some health-care providers to put pressure on consumers for applying for health-care credit cards.
Cuomo said, "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.”
Samuel Wang, a Citigroup spokesman said that an industry wide investigation was underway that was being conducted by the New York Attorney General into the medical financing industry. He added, "We will cooperate with the attorney general's office on this matter."
According to Cuomo says a fee for the right to offer the cards is charged on health-care providers and based on the amount of money generated through CareCredit sales, a portion of the fee is rebated to them. This leads to kickback arrangement.
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