Guide · Healthcare
Patient financing disputes: why a lender dispute isn’t a chargeback
When a patient pays with a lender such as Sunbit, Cherry or Affirm, a complaint goes to the lender, not through the card networks. The lender decides under its own terms and your merchant agreement, often on a shorter clock, and it can take the money back from you directly. Read your agreement before the first dispute arrives.
Key takeaways
- A lender isn’t a card network. The lender decides, under its own terms and your agreement.
- The clocks are short. Some lenders want answers in days, not weeks.
- Refund through the lender. A check to the patient doesn’t touch the loan.
- Your agreement is the rulebook. Terms vary by lender and by contract. Read yours.
Why a lender dispute isn’t a chargeback
With a card payment, the patient disputes the charge with their bank, the card network’s rules apply, and you answer through your processor. Visa and Mastercard publish those rules. Everyone plays the same game.
Patient financing works differently. The lender pays you, and the patient owes the lender. When the patient is unhappy, they complain to the lender. The lender decides what happens, under its own program terms and the merchant agreement you signed. If it sides with the patient, it can usually take the money back from you directly, through a refund demand, a debit or an offset against future funding.
There’s no network rulebook and often no neutral referee. That’s the part practices miss.
The kinds of patient financing
| Type | Examples | Who decides a dispute |
|---|---|---|
| Healthcare credit card | CareCredit (a Synchrony program) | The issuing bank. The patient has credit card billing-dispute rights, and your provider agreement sets how disputes reach you. |
| Installment loan | Sunbit, Cherry and similar lenders | The lender, under your merchant agreement |
| Pay-later plan | Affirm and similar providers | The provider. Stripe says providers like these decide their own disputes. |
The same brand can reach you different ways. Sunbit and Affirm, for example, can be taken through Stripe, and then disputes show up in your Stripe Dashboard with their own rules. If the patient paid with an ordinary Visa or Mastercard, it’s a card dispute.
Lender clocks: short and different every time
A few published examples show the range:
- Sunbit through Stripe: 12 calendar days to submit evidence. Sunbit decides within 35 days. No appeal. No Sunbit dispute fee. There’s no set time limit for customers to file.
- Affirm through Stripe: 15 calendar days to submit evidence. Affirm decides within 60 days. Customers have up to 120 days from the purchase to file.
- Cherry: its published merchant agreement asks practices to cooperate with disputes and respond within five business days.
Other lenders and other agreements use different numbers, and your signed agreement may differ from any public version. Use the date on the lender’s notice, and check your agreement for the rest.
The surprise clause: financing agreements often let the lender take disputed amounts back from you directly, without waiting for a referee. Cherry’s published agreement, for example, says the practice will refund on demand. Find that clause in yours now, not after the first debit.
Why the patient’s complaint follows the loan
The FTC’s Holder Rule preserves a consumer’s right to raise the same claims and defenses against whoever holds their credit contract as they could against the seller. In plain terms: if a patient says the treatment wasn’t done, that complaint can be a reason not to pay the lender. The lender then turns to your agreement.
Credit cards have a parallel rule. Under Regulation Z, a cardholder can, in some cases, raise a dispute with a merchant against the card issuer, after a good-faith attempt to resolve it with the merchant. Federal law gives patients real leverage either way.
Refunds go through the lender
When a financed patient is owed money, refund through the lender’s process. Through Stripe, a Sunbit or Affirm refund cancels the remaining scheduled payments and returns what the patient already paid (Affirm keeps any interest paid). Sunbit’s terms on Stripe also say unused funds can’t be kept as a credit for future services, even under a no-refund policy.
A check handed to the patient does none of that. The loan stays open, the patient keeps paying, and you’ve set up the next dispute.
What to check in your agreement
- How many days you have to answer a dispute or information request
- When the lender can recover money from you, and how
- How refunds must be processed
- Any rule about how soon treatment must follow funding
When a dispute comes, the proof that matters is simple: the signed treatment plan and financing terms, and dated records that the treatment was done. Send the lender what it asks for, nothing more. Patient records deserve care.
Dispute Daddy works from the lender’s notice and your own records. It builds the response for you to review, and you submit it to the lender yourself. See how Dispute Daddy builds it for you.
