Credit Karma Fined £3Million by FTC For Misleading Consumers With Credit Card Offers

credit karma A US consumer watchdog fined $3 million for making misleading claims that people had or could be approved for credit or loans.

With 100 million members in the US, Canada and the UK, the company is best known for giving its customers free access to their credit score and other personal finance tools. We also offer our customers third-party credit cards and loans that match their credit history.

However, according to Federal Trade Commission, Credit service companies deployed “dark patterns” to misrepresent consumers as being “pre-approved” for credit card offers.

The FTC used the argument that the company often failed to ultimately qualify to entice consumers to pre-approve and “90% of the time” sign up for offers. claimed to have done so.

Credit Karma will have to pay $3 million, which will go to consumers who “wasted their time applying for these credit cards and stopped making these types of deceptive claims.”

Samuel Levine,director FTC’s Office of Consumer Protection, said: Credit Karma’s false “pre-approval” claim led to consumers wasting time and undergoing unnecessary credit checks.

FTC violation

Credit Karma violated Section 5 of the FTC Act, according to the watchdog complaint. Under this law, the FTC has the power to take action against companies that engage in unfair and deceptive conduct and practices. The FTC’s proposed order against Credit Karma requires the company to:

  • Stop fooling consumers: The FTC’s order prohibits Credit Karma from deceiving consumers as to whether they have been approved or pre-approved for credit offers and the probability or likelihood that consumers will be approved for credit offers. is prohibited.
  • Pay $3 million in consumer compensation: The order requires Credit Karma to pay the FTC $3 million, which will go to consumers harmed by the company’s actions.
  • Save records: Credit karma must be held on orders to prevent further use of deceptive dark patterns Market, behavioral, psychological research or user, customer or usability testing, including A/B or multivariate testing, copy testing, surveys, focus groups, interviews, clickstream analysis, eye or mouse tracking studies, heat maps Record, or play or record a session.

The FTC is urging businesses to adopt a “consumer-centric” approach. It said, “Bringing people in on a false pretext is likely to provoke consumer anger and draw the attention of law enforcement. , apps and marketing materials should be reviewed.”

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