Synchrony Bank has faced a long series of lawsuits and government enforcement actions covering deceptive credit card marketing, discriminatory lending, CareCredit’s deferred-interest terms, harassing debt collection calls, securities fraud, and the treatment of active-duty military borrowers. The largest Synchrony Bank lawsuit resulted in more than $259 million in consumer relief under a joint CFPB and Department of Justice order, and separate settlements have added tens of millions more for cardholders, patients, and investors. Here is what each case was about, who was covered, and what it means if you hold a Synchrony-issued card.
The $225 Million CFPB and DOJ Action
In June 2014, the Consumer Financial Protection Bureau and the Department of Justice brought a joint action against GE Capital Retail Bank, Synchrony’s predecessor. The order addressed two separate problems.1Consumer Financial Protection Bureau. Synchrony Bank (f/k/a GE Capital Retail Bank)
The first was deceptive credit card marketing that harmed roughly 638,000 consumers. The second was discriminatory lending: between January 2009 and March 2012, GE Capital excluded about 108,000 Hispanic borrowers from two debt-repayment offers, “Statement Credit” and “Settlement,” because they either preferred Spanish-language communications or had mailing addresses in Puerto Rico. Those borrowers ended up with higher debt loads, longer repayment periods, and greater default risk. GE Capital itself identified and reported the discrimination to the CFPB.2U.S. Department of Justice. Justice Department and Consumer Financial Protection Bureau Reach $169 Million Settlement
The consent order required $56 million in refunds for deceptive marketing, $169 million to borrowers denied debt relief, and a $3.5 million civil penalty. By the time the CFPB closed the file, Synchrony had provided at least $259 million in consumer redress. The order was formally terminated on May 12, 2025.1Consumer Financial Protection Bureau. Synchrony Bank (f/k/a GE Capital Retail Bank)
CareCredit Cases: Deferred Interest and Enrollment Practices
CareCredit, Synchrony’s healthcare financing card, is marketed through doctors’ offices, dental practices, and veterinary clinics with promotional periods advertised as “no interest.” If the balance isn’t paid in full before the promo period ends, interest accrues retroactively to the purchase date at rates that have reached 26.99% or higher.3Consumer Financial Protection Bureau. Prepared Remarks of CFPB Director Richard Cordray on the CareCredit Enforcement Action
2013 CFPB Order: $34.1 Million Fund
In December 2013, the CFPB ordered GE Capital Retail Bank and CareCredit to establish a $34.1 million reimbursement fund for more than 1.2 million consumers harmed by deceptive enrollment dating back to January 2009. Patients were often signed up by undertrained medical staff who described the product as an interest-free loan or a payment plan, sometimes without providing a paper copy of the credit agreement. The consent order required CareCredit to call new applicants within three days to explain the terms, and for transactions over $1,000, enrollment had to go through a CareCredit representative rather than the provider’s office.4Consumer Financial Protection Bureau. GE Capital Retail Bank CareCredit Enforcement Action
New York Attorney General Assurance
The New York Attorney General reached a parallel Assurance of Discontinuance requiring “Transparency Principles” in CareCredit’s provider contracts: a three-day cooling-off period on in-office applications (with a $1,000 safe harbor for same-day charges), highlighted promotional-expiration warnings on billing statements, and a ban on kickbacks to providers. CareCredit also paid $125,000 in investigation costs.5New York Attorney General. Assurance of Discontinuance, GE Capital Retail Bank and CareCredit
The 2024 Usury Class Action
In August 2024, a CareCredit user who financed veterinary care filed S.G. v. Synchrony Bank in the Eastern District of New York, alleging that CareCredit’s 32.99% interest rate (rising to 39.99% on late payments) violates New York’s 16% civil and 25% criminal usury limits. The complaint asked the court to void CareCredit agreements and sought actual and treble damages, restitution, and disgorgement.6GovInfo. S.G. v. Synchrony Bank, Case No. 24-CV-5788
Synchrony moved to compel individual arbitration under its clickwrap terms. On March 25, 2026, District Judge Gary R. Brown adopted a magistrate’s recommendation granting the motion, and the case was stayed pending arbitration.7PACER Monitor. S.G. v. Synchrony Bank
A separate California proceeding involves a consumer identified as “Venus,” who filed a cross-complaint after Synchrony sued her for a $5,045.81 dental debt. She alleges her dentist enrolled her in CareCredit while she was in the treatment chair, and cites a California law effective in 2020 that bans deferred-interest financing in medical settings and prohibits signing up patients for credit while they are sedated or in treatment areas.8The American Prospect. Predatory Lenders in the Operating Room
California’s $3.5 Million Collection Calls Settlement
In November 2021, a coalition of California district attorneys from Riverside, San Diego, Los Angeles, and Santa Clara counties announced that Synchrony had agreed to pay $3.5 million to resolve allegations of harassing debt collection calls. The California Debt Collection Task Force alleged that Synchrony and its call centers placed an “excessive and unreasonable volume” of calls, continuing even after consumers said the calls were made in error or that they did not owe the debt.9NBC San Diego. Synchrony Bank Agrees to Dish Out $3.5M Over Harassing Collection Calls
The judgment, entered by Los Angeles County Superior Court Judge Rupert Byrdsong on November 9, 2021, broke down as $2 million in civil penalties, $975,000 in investigative costs, and $525,000 in restitution to a consumer protection trust fund. Synchrony did not admit wrongdoing but agreed to limit call frequency and honor stop-contact requests.10Riverside County District Attorney’s Office. Synchrony Bank Ordered to Pay More Than $3 Million to Resolve Civil Enforcement Action
The $34 Million Securities Fraud Settlement
Synchrony Financial, the bank’s publicly traded parent, settled In re Synchrony Financial Securities Litigation for $34 million in the District of Connecticut. Investors alleged the company misled them about its underwriting and its Walmart partnership.11Synchrony Securities Litigation. Synchrony Financial Securities Litigation Settlement
The surviving claim centered on a January 19, 2018, earnings call in which CEO Margaret Keane said the company was “not getting any pushback on credit” from retail partners. Investors alleged this was false because Walmart had already balked at renewing its credit card contract over Synchrony’s tighter underwriting and was soliciting bids from competitors. The Second Circuit ruled in February 2021 that this specific factual claim could be proven false, while affirming dismissal of vaguer statements about “disciplined” underwriting. The class period was narrowed to January 19 through July 12, 2018.12FindLaw. In re Synchrony Financial Securities Litigation
The court granted final approval on August 7, 2023. The recovery worked out to roughly $0.23 per affected share before fees, or 11% to 16% of maximum recoverable damages. Distribution began in August 2024, with a second round in July 2025.13Bernstein Litowitz Berger & Grossmann LLP. Notice of Pendency of Class Action and Proposed Settlement
The Military “Veteran Penalty” Class Action
In June 2024, two service members filed Taylor et al. v. Synchrony Bank et al. in the Eastern District of North Carolina. The complaint alleges that Synchrony’s “Military Benefits Program” advertises a 0% interest rate during active duty, then retroactively raises rates to as high as 26% and adds new fees on outstanding balances once the cardholder leaves active service.14ClassAction.org. Synchrony Bank Assesses Illegal Veteran Penalty on Military Service Members, Class Action Lawsuit Claims
The plaintiffs invoke three federal statutes: the Servicemembers Civil Relief Act, which caps interest at 6% during active duty and, they argue, requires that interest above 6% be permanently forgiven rather than deferred; the Military Lending Act, which bars certain predatory practices and forced arbitration against service members; and the Credit CARD Act, which limits retroactive rate increases on existing balances. One named plaintiff is a senior master sergeant in the U.S. Air Force Reserves and Air National Guard. The case is in its early stages.15ClassAction.org. Taylor et al. v. Synchrony Bank et al., Complaint
If Synchrony Sues You for a Balance
Synchrony is one of the country’s most active filers of individual collection cases. In New York alone, the bank filed 2,108 new collection lawsuits in 2025, working primarily through Selip and Stylianou and Mandarich Law Group. Enforcement includes wage garnishments and bank account restraints, sometimes on judgments entered years earlier against defendants who say they were never properly served.16Nahoum Law. Synchrony Bank Filed Over 2,100 N.Y. Debt Collection Lawsuits in 2025
If you are sued, you typically have 14 to 30 days to file an answer, depending on the state. Common defenses include disputing that the account is yours, showing the debt was paid or forgiven, and asserting the statute of limitations. If you ignore the lawsuit, the bank will get a default judgment that authorizes wage garnishment and account seizure.17Synchrony Bank. Credit Card Agreement
The Arbitration Clause That Blocks Class Actions
Synchrony’s standard cardholder agreement requires individual arbitration for most disputes and bars class, representative, and private attorney general actions. It covers Synchrony, its affiliates, agents, and assignees, and reaches claims based on contract, tort, fraud, consumer rights, and credit reporting. Courts have generally enforced it, as the CareCredit usury case shows.17Synchrony Bank. Credit Card Agreement
Debt buyers who purchase defaulted Synchrony accounts can also invoke the clause. In Midland Funding, LLC v. Briesmeister (2022), an Arkansas appeals court held that a debt buyer “steps into the shoes” of the bank and inherits the right to compel arbitration, and that fair-debt-collection claims are “inextricably tied” to the account.18FindLaw. Midland Funding, LLC v. Briesmeister
Third-party collectors have not always fared as well. In Smith v. GC Services, an Indiana federal court denied a collection agency’s motion to compel arbitration because the clause requires a demand from “the customer or the bank,” and held that the class action waiver protected only Synchrony itself, not a separate collector.19GovInfo. Smith v. GC Services Limited Partnership
Two features of the clause are worth knowing. You can reject arbitration within 45 days of opening the account by sending a written notice to the bank. And in a mass arbitration filing, the agreement requires consumers to advance half of the administrative and arbitrator fees, which changes the cost calculation for large-scale individual campaigns.17Synchrony Bank. Credit Card Agreement