In response to Credit Karma's practice of misleading consumers with false "pre-approved" credit card offers, the Federal Trade Commission (FTC) is initiating a claims process to compensate affected individuals. The FTC alleges that countless consumers were denied credit cards after being misinformed by Credit Karma, resulting in wasted time and unnecessary credit checks.

Approximately 497,425 consumers will receive notices from the agency, informing them about their potential eligibility for compensation. Most consumers will be contacted via email, with the remaining 4,000 individuals, who lack email addresses, receiving notices through traditional mail. Eligible consumers can submit their claims online at www.ftc.gov/CreditKarma.

For those who require assistance with the claims process or have questions, they can reach out to info@CreditKarmaSettlement.com or call 866-848-0871. The deadline to file a claim is set for March 4, 2024.

The enforcement action against Credit Karma was first announced by the FTC in September 2022. The allegations brought forward by the agency revolve around Credit Karma's use of deceptive claims to entice consumers into applying for credit cards they were not actually pre-approved for. In some instances, Credit Karma went as far as claiming consumers had a 90% chance of approval. As a result, many consumers incurred hard inquiries on their credit reports, with denials potentially causing unnecessary damage to their credit scores.

In order to settle the charges, Credit Karma has agreed to pay $3 million. The FTC plans to utilize these funds to compensate consumers who suffered harm due to the company's actions. Prior to announcing the enforcement action, the FTC received around 30 complaints regarding Credit Karma's "pre-approved" offers over a span of five years. However, within five months of the announcement, the agency received an additional 900 similar complaints, highlighting the widespread impact on consumers.

The Federal Trade Commission serves to ensure fair competition, consumer protection, and education. For more information on consumer-related topics, individuals can visit consumer.ftc.gov. To report instances of fraud, scams, or unethical business practices, the FTC encourages individuals to visit ReportFraud.ftc.gov.