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Why Don’t People Sue Their Doctors Over Bad Credit Advice?

posted by Jim Hawkins

In my first post, I mentioned how common it is for fertility doctors (and other doctors, as the comments point out) to direct patients to specific third party creditors.  Sometimes doctors direct patients to credit sources that are inferior to other available credit.  This isn’t surprising because doctors face a conflict of interest when recommending creditors – doctors have to pay third party creditors they partner with when patients use loans to pay for treatments.  Different creditor charge doctors different amounts (you can see a run down here), so doctors have an incentive to pick the creditor who offers the best terms to the doctor, not necessarily the one who offers the best terms to the patient.  Other times, patients take out loans with third party lenders believing they are borrowing from their doctor or misunderstanding the terms of the loan.  I was fooled myself looking at fertility clinics' websites.  On a few occasions the website seemed to say the clinic was offering loans, but when I called the clinics, I found out that they merely partnered with third party lenders.

When patients rely on their doctors and get inferior credit or when they take out loans misunderstanding the terms, we might expect some of them to sue.  People who have successful treatments might be disinclined to sue (see pages 133-135 for an analysis of this in another fertility financing arrangement), but we'd expect people with failed treatments and loads of debt to get angry. 

But my question is what legal theories could people use?

Patients can't use the Truth in Lending Act because doctors and clinics aren't creditors under the Act--they are just arrangers of credit.  They can't use the doctrine of informed consent because it typically only requires that doctors disclose medically related information, not financial information.  Some state consumer protection laws might apply if the doctor lies about the credit, but these statutes don't require the doctor make disclosures about the credit, so merely failing to disclose the terms of the credit isn't actionable.

As far as I can tell, patients are basically out of luck.  Any thoughts about how patients can sue?   

Comments

Sorry for the late comment. A useful set of cases might be the H.R. Block cases, where taxpayers sued H.R. Block for refund anticipation loans. I think the theory was that H.R. Block was a fiduciary for the taxpayer, so steering them toward a loan from a lender who was paying H.R. Block was a conflict of interest. But, many states said that H.R. Block wasn't the taxpayers agent, although a few did. Doctors might be seen as more of a fiduciary to the patient, but maybe not for the purpose of arranging credit? Interesting.

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