FTC Imposes $3 million Fine on Credit Karma for Misleading “Pre-Approved” Claims

When it comes to credit card offers, it’s important to be aware of the terms and conditions. Some companies may use language such as “approved” or “pre-approved” to entice consumers, but it’s crucial to read the fine print and understand the details of the offer. And it’s easy to see why this is so important.

In a review by ConsumerAffairs of Credit Karma’s credit card offers, a customer named Emily shared that the website promoted misleading APRs and monthly payments for credit cards. The Federal Trade Commission (FTC) also found that Credit Karma used “dark patterns” to mislead customers into believing they were pre-approved for credit card offers, even though they may not have been creditworthy. Once customers filled out the applications, Credit Karma gathered data points on consumers, which they used to send targeted advertisements and financial product recommendations.

The FTC and Credit Karma have come to an agreement regarding the company’s credit card offers and the language used to promote them. As part of this agreement, Credit Karma will pay $3 million to consumers who were affected by these offers and will no longer use any deceptive claims in their advertisements. A Credit Karma spokesperson stated that while the company disagrees with the allegations made by the FTC, they have agreed to this settlement.

As we’ve seen, it’s important for consumers to speak up when they encounter any situations that they believe to be unfair or dishonest. The FTC encourages individuals to submit their concerns through its complaint website, as this helps to protect other consumers and hold companies accountable. In the case of Credit Karma, any individuals who submitted complaints may be eligible to receive a portion of the $3 million fine that the company agreed to pay. This makes it even more crucial for consumers to speak up and share their experiences, as it can not only help others but also potentially benefit themselves.