Advertising payment plans and patient financing: the Reg Z rules for practices

Many practices that offer elective care, such as implants, aligners, cosmetic treatments or hearing aids, mention financing in their marketing. A line like “as low as $99 a month” or “no interest for 12 months” feels like a simple price message. Under federal Truth in Lending rules it is a credit advertisement, and the words you choose decide what else the ad must say.

This guide walks through the parts of Regulation Z (12 CFR part 1026) that matter when a practice promotes payment options, using the regulation’s own text, and the questions to take to your attorney or your financing provider.

Why a practice is covered even if it is not the lender

Regulation Z defines an advertisement in 12 CFR 1026.2(a)(2) as a commercial message in any medium that promotes, directly or indirectly, a credit transaction. That includes a website page, a social post, a Google ad, a flyer at the front desk and a script your staff read on the phone.

The CFPB’s official interpretation of that definition says all persons must comply with the advertising provisions in 1026.16 and 1026.24, not just creditors, and gives merchants who are not themselves creditors as an example. So when a practice promotes a third-party lender or medical credit card, the advertising rules apply to the practice’s ad, not only to the lender’s own materials.

Which section applies depends on the type of credit. Installment loans and fixed payment plans are closed-end credit, covered by 1026.24. Medical credit cards and other revolving lines are open-end credit, covered by 1026.16. Ask your financing provider which type each product is before you write about it.

Rule one: only advertise terms that are actually available

Both sections start the same way: if an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor (1026.16(a) and 1026.24(a)). If your lender stopped offering a 0% promotion, or offers it only above a minimum amount, your old ads and website copy need to change with it.

Disclosures required by these sections must be made clearly and conspicuously (1026.24(b)). A footnote in light gray at the bottom of a long page is the kind of placement to question.

Triggering terms in installment plan ads

For closed-end credit, 1026.24(d)(1) lists four triggering terms. If an ad states any of them, it must also state the additional terms in 1026.24(d)(2).

• The amount or percentage of any downpayment, such as “$0 down” or “10% down”.
• The number of payments or period of repayment, such as “12 monthly payments” or “pay over 24 months”.
• The amount of any payment, such as “$99 a month”.
• The amount of any finance charge.

Once triggered, the ad must state the downpayment amount or percentage, the terms of repayment over the full term of the loan, including any balloon payment, and the annual percentage rate, using that term, and the fact that the rate may increase after consummation if it can (1026.24(d)(2)). The regulation allows an example of one or more typical extensions of credit with all the terms for each.

General phrases that state no terms, such as “financing available” or “ask about payment options”, do not appear on the triggering list. Many practices start there and send people to a page with full terms.

For websites, 1026.24(e) allows the terms to sit in a clearly and conspicuously presented table or schedule, as long as any statement of a triggering term elsewhere in the ad clearly refers to where that table begins.

Stating a rate

Under 1026.24(c), if an ad states a rate of finance charge, it must state it as an “annual percentage rate,” using that term, and say if the rate may increase after consummation. For credit not secured by a dwelling, a simple annual rate or periodic rate applied to the unpaid balance may appear only alongside the APR and not more conspicuously. So “low rates” with a number needs the APR next to it.

Medical credit cards and “no interest if paid in full”

Many medical credit cards use deferred interest. Regulation Z defines deferred interest in 1026.16(h)(2) as finance charges that a consumer is not obligated to pay, or that will be waived or refunded, if the balance is paid in full by a specified date. The CFPB’s 2023 report on medical credit cards and financing plans describes these products and the risks to patients, and notes that financial companies market them to healthcare providers, who are encouraged to promote them to patients.

If you advertise a deferred interest offer, 1026.16(h) requires, among other things:

1. The deferred interest period, stated clearly and conspicuously.
2. “If paid in full”, stated before the period whenever the ad says “no interest” or a similar term, and in written or electronic ads placed in immediate proximity to each statement such as “no interest”, “no payments” or “same as cash”.
3. A statement that interest will be charged from the purchase date if the balance is not paid in full within the period, and if applicable from that date if the account is in default, in language similar to the CFPB’s model wording (Sample G-24 in appendix G), placed close to the first “no interest” statement.

Other open-end terms trigger disclosures too: 1026.16(b) lists terms such as finance charges, any periodic rate expressed as an APR, and membership or participation fees. In practice, the safest source for exact wording is your financing provider’s approved advertising language, checked by your attorney, rather than copy written from memory.

In-house payment plans

Some practices let patients pay over several months without a lender. Regulation Z’s definition of creditor in 1026.2(a)(17) includes a person who regularly extends consumer credit that is subject to a finance charge or is payable by written agreement in more than four installments, not counting a downpayment. A practice that meets that definition may have Truth in Lending duties beyond advertising, such as disclosures to the patient. Ask your attorney before you set the number of installments or add any fee for paying over time.

Self-pay patients and good faith estimates

Financing does not replace price information patients are entitled to. CMS explains that, usually, if a patient is not using health insurance to pay for care, the provider must give a good faith estimate of expected charges if the patient requests one or schedules services at least 3 business days in advance. Make sure the person who answers the phone knows how to handle an estimate request; our new patient phone script is a starting point.

Writing financing copy: a checklist

• Ask the lender whether each product is closed-end or open-end, and get their approved ad language in writing.
• Decide whether the ad needs a specific term at all. “Payment options available” with a link to full terms is simpler.
• If you show a monthly payment, a number of payments or a downpayment, add the downpayment, full repayment terms and the APR.
• If you say “no interest”, add “if paid in full”, the period, and the interest-from-purchase-date statement.
• Keep terms current: remove expired promotions from the website, ads, social posts and phone scripts.
• Do not tie financing to medical urgency or pressure, and do not make treatment outcome claims in the same ad.

For a broader look at how practices offer financing to patients, including how to talk about it at the front desk, see this guide to patient financing for elective treatments.

If a balance goes unpaid, the rules on billing messages, collection agencies and credit reporting are in our medical debt collection rules guide.

How we help

We write practice websites and ads that keep price and financing messages accurate and easy to read, and we use the wording your financing provider and attorney approve. We do not give legal advice. See our dental marketing and med spa marketing services, or the full list in our healthcare marketing rules guide.

Frequently asked questions

Sources

• 12 CFR 1026.24: Advertising (closed-end credit)
• 12 CFR 1026.16: Advertising (open-end credit, including deferred interest)
• 12 CFR 1026.2: Definitions (advertisement, creditor)
• CFPB: Official interpretation of 1026.2 (persons covered by advertising rules)
• CFPB: Medical Credit Cards and Financing Plans (May 4, 2023)
• CMS: Good faith estimates

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