Synchrony Bank Facing Class Action Lawsuit Over Allegedly Illegal Interest Rates on CareCredit Accounts

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A proposed class action lawsuit alleges Synchrony Bank has violated state usury law by imposing excessively high interest rates on CareCredit accountholders.

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The 24-page lawsuit explains that at medical and veterinary offices nationwide, consumers who are unable to pay in full for services are often offered CareCredit, a credit card account that provides a line of credit for the amount needed to cover the bill. According to the filing, the interest rate on new CareCredit accounts is an “astonishing” 32.99 percent per annum—far higher than the 16-percent maximum rate for loans less than $250,000 set by applicable New York law.

“To compound such matters, these loans are offered to consumers at extremely vulnerable moments in their lives—and they are unable to grasp the potential financial ruin that awaits them when they ultimately choose to pull the trigger on one of these usurious loans,” the suit contends.

The complaint claims that CareCredit’s predatory lending tactics are designed to exploit consumers in their most desperate moments, forcing patients, their loved ones or pet owners to concede to its terms and pay extraordinarily high, illegal interest rates in exchange for lifesaving care.

The plaintiff, a Washington, D.C. resident, says that when his cat, Pumpkin, fell critically ill in 2021, staff at the emergency veterinary center informed him that he would need to pay more than $2,000 upfront for the necessary treatment. However, the man couldn’t afford to pay the bill all at once, the case relays.

“Faced with no other alternatives to keep Pumpkin alive, [the plaintiff] was presented with CareCredit as an option by the emergency veterinary center,” the complaint says. “[The plaintiff], in a state of duress and severe stress, agreed to CareCredit’s terms when they were essentially forced upon him.”

Per the CareCredit lawsuit, the plaintiff’s account statement shows that it would take 14 years and $7,752 to pay off the initial $2,000 loan if he made minimum payments on the account into the foreseeable future.

The case alleges that Synchrony Bank’s noncompliance with state usury law renders loans issued through CareCredit.com void.

The lawsuit looks to represent any CareCredit accountholders who signed up on CareCredit.com in the United States and accrued interest above 16 percent per annum during the applicable statute of limitations period.

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