If You Applied to Credit Karma and Were Turned Down, You Might Get a Refund, according to the FTC

Mark Hake

On January 23, 2023, the Federal Trade Commission (FTC) finalized an order that will require Credit Karma to pay out $3 million to consumers. They "wasted time" listening to Credit Karma's claim that they had a 90% chance of getting approved or were "pre-approved" for credit.

The FTC said Credit Karma used deceptive practices and dark patterns to misrepresent that consumers were “pre-approved” for credit card offers.

On Sept. 1, 2022, the FTC originally charged Credit Karma with deceiving consumers:

  • Despite Credit Karma’s claims that consumers were “pre-approved,” for many offers, almost a third of consumers who applied were in fact denied. Credit Karma often only revealed the possibility of denial in buried disclaimers or false claims that consumers had “90% odds” of approval.
  • Credit Karma knew its consumers were being misled. For example, its own customer service training materials cited “I was declined for a pre-approved credit card offer .... How is that possible?!?!?!” as a common issue representatives would encounter.

In addition to wasting time, third-party financial companies made a “hard inquiry” on their credit reports. This often lowered consumers’ credit scores and harmed their ability to secure other financial credit.

So far, the FTC has not set up an administrator nor any hotline for people to see if they are due a refund from Credit Karma. Typically this takes several months.

However, consumers can track the various refunds that the FTC is paying out on this website. It shows when the order was finalized and the name of the administrator that is paying out the claims.

For example, a recent case against Epic Games has resulted in a massive $245 million refund scheme for excessive charges on its Fortnite game. The FTC has still not set up an administrator for this massive refund scheme, which makes the $3 million Credit Karma refund look paltry.


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Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at InvestorPlace.com, Barchart.com, Medium.com, and Newsbreak.com as well as TalkMarkets.

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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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