The settlement agreement is a cautionary tale at a time of rising interest rates.
Credit Karma has reached a $3 million settlement with the Federal Trade Commission after allegedly misleading users shopping for credit cards by informing them about “pre-approved” offers that later resulted in rejection.
Though Credit Karma users heard language like “pre-approved” and “90% odds” in emailed notices about offers from third-party card issuers, it didn’t always pan out that way. Though Credit Karma flagged the possible chances of rejection in the notices, that wording allegedly didn’t appear as prominently as the company’s notices about pre-approval, the FTC said.
“Credit Karma’s false claims of ‘pre-approval’ cost consumers time and subjected them to unnecessary credit checks,” Samuel Levine, the FTC’s Bureau of Consumer Protection director, said in a statement with the agreement announced Sept. 1. What’s more, the company said the FTC’s allegations only focused on a sliver of credit-card and loan offers from banks and financial institutions that were available on the site’s platform before April 2021.
— Bankrate.com analysis By the end of August, the average rate on a new card offer was 17.96%, according to Bankrate.com. That surpasses a recent pre-pandemic APR high of 17.87% and is approaching the 18.12% average APR last seen in January 1996, researchers said.
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Credit Karma ordered to pay $3M for ‘tricking’ consumers with pre-approved offersThe FTC said Credit Karma wasted consumers’ time and hurt their credit scores when they applied for offers they weren’t actually pre-approved for.
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Credit Karma money: FTC orders company to pay users $3M for 'false claims'The Federal Trade Commission has ordered the company to pay users after falsely claiming they were pre-approved for credit cards.
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Credit Karma money: FTC orders company to pay users $3M for 'false claims'The Federal Trade Commission has ordered the company to pay users after falsely claiming they were pre-approved for credit cards.
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Credit Karma money: FTC orders company to pay users $3M for 'false claims'The Federal Trade Commission has ordered the company to pay users after falsely claiming they were pre-approved for credit cards.
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Credit Karma money: FTC orders company to pay users $3M for 'false claims'The Federal Trade Commission has ordered the company to pay users after falsely claiming they were pre-approved for credit cards.
Les mer »