Credit Karma Gets In Trouble With The FTC

Mark Hake

The Federal Trade Commission (FTC) reached an agreement on Sept. 1 with Credit Karma for fraud relating to its credit card offers. Credit Karma is a consumer credit technology company that is now a division of Intuit (INTU), a $118 billion market cap financial management and compliance company.

The FTC took action against Credit Karma as the company used claims that consumers were “pre-approved” and had “90% odds” to entice them to apply for offers that, in many instances, they ultimately did not qualify for. The FTC says this activity lasted from February 2018 to April 2021 and led to Credit Karma falsely telling many consumers that they had been “pre-approved” for credit offers.

The FTC struck an agreement with the company to pay $3 million "that will be sent to consumers who wasted time applying for these credit cards and to stop making these types of deceptive claims."

The order did not say when the payments will be made, how people can see if they will receive any payment or how the list will be made public, if at all.

Credit Karma put out a press release saying they "fundamentally disagree with the FTC’s allegations about marketing terms that aren’t even in use anymore." They said they reached the agreement "to avoid disruption to our mission and maintain our focus..."

Interestingly the company says the FTC "does not challenge the approval odds language Credit Karma has provided to its members since April 2021, including through the present." The FTC order said that the company falsely represented that consumers were pre-approved for credit offers or had 90% odds of approval.

Words Matter

Credit Karma did not indicate what new approval odds language they are using now. But here is what the press release says about using Credit Karma now:

"Members shopping for credit cards on Credit Karma have an over 50% higher approval rate than the national average."

The sentence has a footnote that offers the following explanation as a source for the 50% higher approval rate statement:

"Based on a comparison of Credit Karma member approval rates in calendar Q4 2021 vs the national approval rates for general purpose credit cards from 2020 according to the Consumer Financial Protection Bureau’s 2021 Consumer Credit Card Market Report (36%)."

However, this footnote does not provide any link. We attempted to find the source of this statement in the Consumer Financial Protection Bureau's report referenced by Credit Karma. The 2021 CFPB Consumer Credit Credit Market Report has no reference to Credit Karma either in its language or in any particular figure, graph or table.

So it's not clear what the basis is for Credit Karma's statement that its members have a 50% higher approval rate than the national average.


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Mark R. Hake, CFA writes articles at,,, and as well as a Beehiiv free newsletter on stocks and cryptos.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ

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