CHARLOTTE — Earlier this month, Channel 9 reported that Credit Karma had agreed to pay consumers $3 million to settle allegations of the company sending people misleading offers.
According to the Federal Trade Commission, from February 2018 to April 2021, Credit Karma told many people they were pre-approved to get them to apply for offers, but in many cases, the consumers did not qualify.
The FTC says this “cost consumers time” and “unnecessary credit checks,” which can lower a person’s credit score.
Craig Coil has the Credit Karma app on his phone. He says that two or three times in recent years, the company gave him the impression he was a shoo-in for a new credit card, so he applied but was turned down.
“It was, like, kind of deceitful,” Coil said. “It is disappointing when you click on excellent approval odds and you get an email that says you weren’t approved and here’s the reasons why.”
Credit Karma released a statement about the agreement on its website.
The company also emailed the following statement to Action 9′s Jason Stoogenke:
“Credit Karma has no incentive to mislead members. In fact, we are only compensated when members are approved for credit cards and personal loans. We disagree with the FTC’s allegations and do not understand the reference to “dark patterns” in the FTC’s press materials. There are no allegations that members paid unexpected fees or charges of any kind. Further, we aren’t able to independently verify the numbers cited in the FTC complaint. What we know today is only less than 1,500 people have ever contacted us stemming from anything related to this.”
In the end, the company did not admit to any wrongdoing, but it still agreed to pay $3 million to settle the case.
Here’s what happens next:
- The FTC is currently holding a public comment period that ends Oct. 6.
- Then the commission will decide whether to finalize the settlement. People familiar with the process told Stoogenke that should be a formality.
- Credit Karma would then have 15 days to provide alleged victims’ information to the agency.
- Next, the commission would come up with a plan to divvy up the $3 million.
- At that point, Stoogenke will report whether you have to do anything to request the money or if it will be automatically distributed.
Although you can’t apply for the money yet, there are two things you can do right now:
- Tell the FTC what you think for the public comment period here.
- File an official complaint here if you think you are a victim.
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