(NEXSTAR) – Roughly half-a-million people may be eligible for settlement payments tied to credit card offers from Credit Karma, the Federal Trade Commission (FTC) said in a news release this week.
The payments are tied to a 2022 investigation the FTC launched after getting reports that Credit Karma, which is owned by Intuit, was falsely claiming customers were “pre-approved” or had “90% odds” of being approved for credit card offers. Thousands of applicants were rejected, costing them time and also damage to their credit scores after hard inquiries to their credit reports, the FTC said.
Credit Karma told Nexstar in a statement that it “fundamentally disagree[s]” with the allegations the FTC made in its complaint, “which relate solely to statements we ceased making years ago.”
The statement went on to say that “any implication that Credit Karma rejected consumers applying for credit cards is simply incorrect, as Credit Karma is not a lender and does not make lending decisions.”
How do I know if I’ll receive any money?
On Tuesday, the FTC said it is sending notices to 497,425 people who may be in line for a payment.
If you believe you are eligible, make sure to check your email for the notice. There are also roughly 4,000 people who will get a letter in the mail since they do not have an email address on file, according to the FTC.
If you do receive a notice, you can file your claim online at www.ftc.gov/CreditKarma, but you’ll have to apply before the March 4, 2024 deadline.
If you think you should be eligible but haven’t seen a notice from the FTC, you can email info@CreditKarmaSettlement.com or call (866) 848-0871.
The FTC says that the $3 million will go to reimbursing Credit Karma users, but the final payment amount will be calculated based on the total number of eligible applicants.
‘Dark patterns’ used, FTC says
In its September 2022 complaint the FTC accused Credit Karma of violating the Federal Trade Commission Act by employing “digital dark patterns” to trick customers.
The FTC defines such dark patterns as actions “that can trick or manipulate consumers into buying products or services or giving up their privacy.”
Examples include making ads look like independent content, burying crucial information or fees in fine print or making it hard to cancel a subscription fee.
The FTC claimed that Credit Karma knew, based on experimental A/B testing, that consumers are far likelier to click on an offer that said “pre-approval” than one advertising “excellent odds” of approval.
“When user interfaces are designed, including with the aid of A/B testing, totrick consumers into taking actions in a company’s interest and that lead to consumer harm, such design tricks have been described as ‘dark patterns,'” the FTC said.
Credit Karma allegedly used the dark pattern advertising from February 2018 to April 2021.
The credit monitoring company continued in its statement to Nexstar Thursday:
Credit Karma helps our more than 130 million members understand their finances, including their likelihood of approval for financial products.We have a track record of positive outcomes, and members shopping for credit cards on Credit Karma have a significantly higher approval rate than the national average. We reached this agreement to put the matter behind us so we can maintain our focus on helping our members find the financial products that are right for them.”
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FAQs
You may be eligible for a payment. The FTC is sending notices to 497,425 people who may be eligible for a payment if they were denied credit after responding to an offer from Credit Karma that said they were “pre-approved” or had a “90% odds” of approval.
Why did Credit Karma send me money? ›
If you aren't approved for a credit card offer with the Karma Guarantee, we'll send $50 your way.
How to get money out of Credit Karma account? ›
How do I make an Instant Transfer?
- Login to your Credit Karma account.
- Go to your Credit Karma Money Spend account.
- Select Transfer.
- Select Withdraw.
- Enter the amount to be transferred.
- Select External Debit Card option. ...
- Enter the debit card details when prompted and click Save.
Credit Karma Money Spend Account is a good free checking account, with no monthly service fee or overdraft fees. This account also offers a unique perk that lets you receive access to government benefits up to five days early. Generally, financial institutions take a few days to process paychecks.
How to find out if Credit Karma owes you money? ›
If you go to Credit Karma Unclaimed Money, we'll automatically point you in the right direction. Credit Karma will direct you to the applicable state's treasury or state controller's website, which is where you typically start the claims process to get your unclaimed money back.
How do I get my money back from Credit Karma? ›
- Access your Credit Karma Money Save account.
- Select Withdraw.
- Enter the desired amount under Withdrawal amount.
- Select Withdraw after making your selections.
- On the confirmation screen, make sure all the information is correct and choose Confirm to complete your withdrawal request.
Once deposits settle, they are available for withdrawal within 1-3 additional business days. Funds transferred into your Credit Karma Money accounts are not available for immediate withdrawal. The process typically takes 1-3 days.
Where is my refund Credit Karma? ›
Your refund tracker will appear shortly after you file your federal tax return. Go to the Refund tracker in Credit Karma. You'll receive an email from Credit Karma when your Refund Advance funds are available to spend.
Where is my Credit Karma money? ›
You can view your Credit Karma Money Spend and Save account balances any time through the Credit Karma website or our mobile app for iOS and Android. To view your balances, visit the homepage for your Spend or Save accounts: Credit Karma Money Spend. Credit Karma Money Save.
What is Credit Karma refund advance? ›
Refund Advance loan from TurboTax
You'll have to apply, as with any other loan, but if approved, you'll receive a portion of your anticipated refund, up to $4,000, in your Credit Karma Money™ Spend account — which is free to open if you don't already have one.
Instant Transfers allow eligible Credit Karma Money Spend account* holders to immediately transfer funds to their own external bank via debit card for a small fee.
How long does it take Credit Karma to deposit a tax refund? ›
You can log in to your Credit Karma account to check it out. The IRS issues most refunds in less than 21 days, though it's possible your tax return may require additional review and take longer to process. Keep an eye on your refund tracker to see the status of your federal tax return.
Can you trust Credit Karma? ›
The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those credit bureaus.
Is my money safe in Credit Karma savings? ›
Funds FDIC insured up to $5,000,000 so your money is protected. No monthly maintenance, transfer, or withdrawal fees. Plus, no minimum balance to open. Set up automated savings to help achieve your financial goals.
What bank is Credit Karma money? ›
Credit Karma is not a bank. We partner with MVB Bank, Inc., Member FDIC, to provide banking services supporting Credit Karma Money Spend and Credit Karma Money Save accounts. When you open a Credit Karma Money Spend account, your funds will be deposited into an account at MVB Bank, Inc. and its deposit network.
How long does it take Credit Karma to release funds? ›
Funds transferred into your Credit Karma Money accounts are not available for immediate withdrawal. The process typically takes 1-3 days. This additional time aims to prevent returned transfers and overdrafts on your external bank account.
Does Credit Karma money send you a card? ›
After our system validates your information you will have a Credit Karma Money Spend account! If you'd like a Credit Karma Visa® Debit Card sent to you, you'll first need to fund your Credit Karma Spend account with a deposit and confirm your mailing address.
Will Credit Karma loan me money? ›
Applying for a personal loan. You can search for loan offers with your Intuit Credit Karma account and sort by annual percentage rate, loan amount or monthly payment. Credit Karma shows you offers from lenders we partner with, but we are not a lender.
Why did I get a check from Credit Karma? ›
There was a bulk account closure on January 25th. They have since paused the bulk account closure process. If your account was closed either on the day you received the Refund Advance or right before you received it, then you will receive a check in the mail.
