FTC Launches Claims Process for Consumers Affected by Credit Karma’s Misleading “Pre-Approved” Offers

Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) has announced the initiation of a claims process for consumers who were negatively impacted by Credit Karma’s misleading credit card pre-approval practices. According to the FTC, Credit Karma falsely represented consumers as “pre-approved” for credit card offers, which resulted in unnecessary credit checks and wasted time for many consumers who were ultimately denied.

Notifications have been sent out to 497,425 consumers who may be eligible for compensation. These consumers had received the offer of pre-approval from Credit Karma but were denied upon application. While most will receive an email notification, approximately 4,000 consumers without an email address on file will receive a notice via regular mail. Eligible consumers are invited to file their claim online.

For any queries or assistance with claim filing, consumers can reach out to info@CreditKarmaSettlement.com or call 866-848-0871. The deadline for filing a claim is March 4, 2024.

The FTC’s enforcement action against Credit Karma was announced in September 2022. The company was accused of using misleading statements such as consumers being “pre-approved” for a credit card or having “90% odds” of approval. These tactics were used to persuade consumers to apply for offers they often did not qualify for. As a result, these consumers experienced a hard inquiry on their credit reports, and those who were denied may have suffered unnecessary damage to their credit scores.

To settle the charges, Credit Karma paid $3 million, which the FTC will use to compensate consumers affected by the company’s actions. In the five years leading up to the FTC’s action against Credit Karma, the agency received around thirty complaints regarding the company’s “pre-approved” offers. However, within just five months of the announcement, nearly 900 additional complaints were received. The FTC notes that this is consistent with their experience that consumer complaints typically only represent a small fraction of the total number of consumers harmed.

READ:  Beware the Allure: Why Celebrities, Activists, and Politicians Can Lead You Astray

For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and Microsoft Start.