New York Subpoeanas J.P. Morgan, Citi Over Health Cards

NEW YORK—The Wall Street Journal

Units of J.P. Morgan Chase & Co. and Citigroup Inc. have been subpoenaed as part of an investigation 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 says 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.
"We understand there is an industrywide investigation into the medical financing industry that is being conducted by the New York Attorney General," said Samuel Wang, a Citigroup spokesman. "We will cooperate with the attorney general's office on this matter." Stephen White, a GE spokesman, said the company plans to cooperate fully the attorney general's office.
"We look forward to learning more," Mr. White said.
A. J.P. Morgan spokesman declined to comment. Mr. Cuomo says 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 says 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.