The Pain Is in the Fine Print

“The devil is in the details,” says the axiom. If you don’t believe it, just ask AARP member Anne King of Mableton, Ga.

She was stunned recently when she received a bill showing a $690 interest charge tacked on to a “no interest” loan she’d just paid off with GE CareCredit.  

Anne had financed corrective eye surgery in August 2007 with CareCredit. The promotional materials for the loan had promised she would not be billed interest if the amount for the procedure was paid off within 18 months. She received her first bill in September 2007, and for the next 18 months, she paid promptly and submitted the last payment on March 18, 2009. With 18 bills paid like clockwork, her $2,700 debt was retired—right? Wrong.

Anne called the CareCredit customer service line and was informed that CareCredit started counting the 18 months from the date of service, August 25, not the date of billing, and that there were no grace periods. So Anne may have made her payments on time, but she was 14 days too late to make CareCredit’s deadline for the ”no interest” offer.

She didn’t think that was fair. Moreover, she says it wasn’t what she had been told by the finance manager at the clinic where she had the procedure. –And why a whopping $690 in interest?

 

Puzzled and frustrated, she contacted me. A few phone calls later, I was able to lay out Anne’s predicament to Cristy Williams, CareCredit’s vice president of communications. Right off, Williams set me straight on a few points.

 

Contrary to what the advertising might lead you to believe, the interest clock doesn’t sit idle for 18 months—though that’s what Anne King says she was told when she signed up. She admits that she took the clinic’s employee at her word and didn’t comb over all the fine print. However, in this case, “no interest” really meant “deferred interest.” The CareCredit interest clock runs all the time. If the consumer misses a payment or is a day late with the last one, he or she is responsible for the full interest on the loan back to day one—at an annual rate of 22.98 percent.

That was the bad news. However, later that afternoon, I received an e-mail from Williams with some good news: “Our health-care advocacy team researched Ms. King’s account,” she wrote. “After reviewing her situation, the team determined that a credit was appropriate, based on her favorable and consistent payment history. We have contacted Ms. King to advise her of the decision to waive any fees or interest charges.”

Williams also wrote: “We clearly display the promotion’s expiration date on every statement. The two statements preceding Ms. King’s promotional end date included additional reminders of the upcoming promotional expiration on her account.”

I called Anne to share the news, only to find out that a CareCredit representative named Julie had called minutes before me with an explanation of why Anne hadn’t been informed of the impending deadline. As it turns out, King wasn’t getting paper statements, as implied in the V.P.’s email to me; King was getting and paying her bills online. She clicked a link in an e-mail notifying her that the monthly bill was ready, and she thereby skipped past the online statement that would have showed her the promotion’s expiration date.

While I’m glad that King didn’t have to pay $690 in interest charges, what happened to her leads me to recommend that anyone with a loan that resets its rate or defers charges should triple-check the terms. Clearly, loan timelines can be confusing and misleading. Above all—and I will say this a thousand times in a thousand columns—read the contract, take your time, and if you don’t feel you understand all the details, don’t sign.

And, if you’re not into old saws, how about a new adage from a 21^st-century consumer advocate? Next time you raise a pen to sign a contract or loan agreement, remember this—“The pain is in the fine print.”