Units of JPMorgan Chase & Co. and Citigroup Inc. have been subpoenaed as part of a probe into alleged predatory lending practices involving health-care credit cards, New York Attorney General Andrew Cuomo said Monday.
Last week, Mr. Cuomo announced he had subpoenaed a number of health-care providers — mostly dentist offices in the New York area — and General Electric Co.'s GE Money unit over its CareCredit health-care credit card program.
Mr. Cuomo claims some health-care providers are using "fast-talking sales pitches" to pressure consumers into applying for health-care credit cards, including those offered by Chase, Citi and GE.
"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," Mr. Cuomo said.
Mr. Cuomo claims health-care providers are charged a fee for the right to offer the cards and then a portion of the fee is rebated to them based on the amount of money generated through CareCredit sales. He claims this amounts to a "kickback arrangement."
The attorney general also said health-care providers are paid within 48 hours of the charge, creating an incentive for them to use the cards, rather than other methods of payment.