Credit Karma has been ordered by the Federal Trade Commission to pay $3 million to clients who it claims were tricked into applying for items they weren’t qualified for.
According to the FTC, Credit Karma used “dark patterns” to mislead customers into believing they were “pre-approved” for credit card offers they normally would not qualify for.
Website and application interface designs that might be utilized to trick or confuse users are referred to as “dark patterns.”
The agency stated in a previously published consent decree that “for many of these offers, roughly a third of individuals who got and applied for ‘pre-approved’ offers were ultimately denied depending on the financial goods companies’ underwriting review.”
Based on the FTC, Credit Karma, which gives users access to tools for tracking their credit scores and reports, informed some customers that they had a “90% chance” of getting approved for credit products. According to the agency, such actions wasted consumers’ time and might have hurt their credit scores.
Credit Karma strongly denied the FTC’s allegations in a statement to CBS MoneyWatch.
A Credit Karma representative wrote in an email that “We strongly disagree with the accusations the FTC makes in their lawsuit.” “Our agreement with the FTC makes no mention of any claimed “dark patterns,” and their allegation is complete without truth. We do not participate in these practices. Additionally, there are no claims that any members paid unusual fees or other penalties.”
