Today, Congressmen Elijah E. Cummings (D-MD), Ranking Member of the House Committee on Oversight and Government Reform, Senator Ed Markey (D-MA) and Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee announced the release of a Government Accountability Office (GAO) report on medical credit cards and related products, including installment loans, offered by financial institutions. 
 
Cummings, Markey and Waters requested a GAO study in 2013 in response to concerns that consumers may have been misled by companies offering these cards. The report describes the market for “third party consumer financial products” used to cover dental care and certain elective procedures not typically covered by health insurance.

“Many consumers taking advantage of these cards have done so because they otherwise lack the financial resources to pay for some part of their medical care,” said Ranking Member Cummings. “That situation puts these often uninsured or underinsured individuals at risk of falling victim to predatory lending practices. This report will help us understand this industry, and ensure it receives the appropriate oversight to prevent any inappropriate lending behavior.”

“This new GAO report provides an important overview of third party medical loans and credit cards and services and will help increase transparency of these products and the financial companies that offer them,” said Senator Markey. “Medical debt already is an unbearable burden for millions of Americans. Consumers may believe they are on a path toward physical wellness when these financial products are often leading them toward financial ruin. I will continue to monitor this industry to ensure we protect patients that may be subject to abusive lending practices or exploitation.”

“We need to take a close look at the issue of medical credit cards, and this report is a good first step,” said Ranking Member Waters. “In December, after investigating hundreds of complaints, the Consumer Financial Protection Bureau ordered a large medical credit card company to refund about $34.1 million to as many as 1 million consumers who were victims of deceptive credit card enrollment tactics.  With medical debt already a significant problem in this country, we can’t afford to have lenders using deceptive practices that, for many consumers, make a bad situation worse.”

To see the full GAO report, click here

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