California Takes Action to Curb “Deferred Interest” Credit Products
SACRAMENTO, Calif., Nov. 5, 2019 /PRNewswire/ -- Earlier this month, the state of California took a decisive step in favor of clear and simple credit products by signing SB-639 into law. When this bill takes effect in July of 2020, it will prohibit medical and veterinary clinics and their employees from arranging for or establishing open-end credits or loans that include deferred interest provisions.
Some of the products that may contain such deferred interest provisions include CareCredit, Wells Fargo Health Advantage, Dental Alliance Credit Card and GreenSky Patient Solutions.
The new legislation seeks to protect pet owners and patients from unwittingly signing up for credit products that are marketed with an introductory period of zero percent interest but actually accrue interest at high rates during the entire introductory period.
Few consumers understand that if they don’t pay the entire balance in the introductory period, or make a late payment, they end up with an interest charge that can be larger than the remaining balance. According to Senator Holly Mitchell, who co-authored the new bill, “while third-party financing may have a place when patients need services they can’t immediately afford, products with deferred interest clauses have no place in medical practice.”
Since our launch in 2016, Scratchpay has been working hard to bring simple, transparent financing products and payment plans to veterinary clinics and pet owners across the U.S. and Canada. We know that the last thing a pet owner needs in a time of distress is a complicated loan or credit product with confusing terms. That’s why Scratchpay has straightforward closed-end payment plans with fixed interest rates and equal payments.
We’ve always believed that customers and patients are longing for simple and transparent products, and we stand behind the state of California’s action to protect its citizens.
Scratch Financial, Inc. (also known as Scratchpay) is a financial technology company that provides simple and friendly payment plans for veterinary care. Founded in 2016 by John Keatley and Caleb Morse and headquartered in Los Angeles, Scratchpay’s mission is to help more pets get access to the care they need to live happy lives. Scratchpay has partnered with over 5,000 veterinary hospitals and has helped tens of thousands of pets receive veterinary care. For more information about Scratchpay, visit www.scratchpay.com or www.facebook.com/scratchpay
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