Getting a root canal, a crown replaced, or even a simple filling at the dentist can really drain your bank account, especially if you don’t have insurance. That’s why a growing number of dental offices are offering third-party financing to patients. But sometimes these loans offer terms that are too good to be true.

That was certainly the case when it came to Springstone Financial, which must provide a total of $700,000 in relief to more than 3,200 individuals who took out dental loans through the company’s healthcare financing program based on the false promise that they were interest-free, the Consumer Financial Protection Bureau announced Wednesday.

According to a consent order [PDF] filed by the CFPB, from January 2009 to December 2014, Massachusetts-based Springstone – a subsidiary of Lending Club Corporation – deceptively marketed the terms of deferred-interest loans offered through its healthcare financing program.

Under the program, which was made available at more than 9,000 healthcare providers, receptionists and office staff at the clinics could provide consumers with application materials and assist them in filling out the application before submitting it to Springstone on the consumers’ behalf.

An investigation by the CFPB found that providers who were trained and monitored by Springstone to market the deferred-interest loans often misled consumers about the terms and conditions of the product during the application process.

An “interest-free” loan generally offers financing where no interest accrues during a certain initial period. That’s different from a deferred-interest loan, which begins accruing interest from the start but doesn’t charge that interest until later. This sort of financing is common for store-branded credit cards.

The Springstone deferred-interest product – which was discontinued in December 2014 – incurred no interest if the balance was paid in full within a certain promotional period.

However, in many cases, dental office staff told consumers that the deferred-interest product was a no-interest loan and failed to mention they would have to pay 22.98% in interest on the loan if they didn’t pay it off in full by the end of the promotional period.

As a result, thousands of consumers ended up paying hundreds of thousands of dollars in unanticipated fees.

Under the consent order, Spingstone must conveniently return $700,000 to more than 3,200 consumers. Eligible customers do not have to take any action to get their refund. Springstone will notify affected consumers and issue a credit or send a reimbursement check to those consumers with an open Springstone account.

Consumer Financial Protection Bureau Takes Action Against Springston Financial For Deceptive Health-Care Credit Enrollment Tactics [Consumer Financial Protection Bureau]

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