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Credit Karma Pays $3 Million for Making Bogus “Pre-Approved” Credit Offers

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Millions of consumers use Credit Karma to monitor their credit scores and credit reports. The company offers several tools and resources to track and manage personal finances. Members are able to retrieve their credit scores, get alerts about changes in credit, and apply for loans or credit cards. For many customers, the services are worthwhile. But for some, Credit Karma’s misleading “pre-approved” credit offers wasted time and subjected them to unnecessary credit checks. For anyone considering a “pre-approved” credit offer, Credit Karma’s $3 million settlement with the Federal Trade Commission (FTC) can help identify pitfalls and tips to protect consumers. Let’s take a look at what happened.

On September 1, 2022, Credit Karma was hit with a FTC complaint alleging that from early 2018 to mid 2021 it used deceptive and misleading claims to entice customers to apply for “pre-approved” credit offers. Credit Karma claimed customers had “90 odds” of approval, when in reality many didn’t qualify. Although Credit Karma knew that it’s “pre-approvals” falsely conveyed a certainty that customers would get approved, they continued to mislead customers to apply and incur a hard inquiry on their credit report. In fact, Credit Karma’s customer service training materials listed pre-approved credit card offer denial inquiries as a common issue representatives would encounter.

Credit Karma is accused of using digital “dark patterns”, which is when a website or mobile app user interface is designed to potentially manipulate the user into taking actions that benefit the company and harm the consumer. Credit Karma’s marketing campaign used large type, repetition, and colorful graphics in their offers to push the ”pre-approved” message. The company buried important disclaimers about the offer not being guaranteed and failed to disclose that the financial products offered were not already approved by the third parties in their solicitations. Almost a third of the applicants were denied for the “pre-approved” offers after the underwriting review process. Consumers wasted their time and had their credit impacted by a hard inquiry that could harm their ability to secure future financial options.

The FTC settlement offer will require Credit Karma to pay $3 million to consumers harmed by their actions. In addition, the company is prohibited from making deceptive “approval or pre-approval” claims or misleading consumers about the likelihood they’ll be approved.

Looking at the Credit Karma case makes it clear that a “pre-approval” offer isn’t a guarantee. It does not mean the credit card company has to provide you with a credit card. You will have to apply, go through the review process, and have your information verified. The company will use your information and credit history to determine whether you meet the criteria for approval.

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Customers that don’t want to receive credit card mailings can choose to opt-out of these solicitations by calling 1-888-567-8688 or visiting You can also register your phone number with the National Do Not Call Registry by visiting or calling (888) 382-1222 to stop credit card solicitation calls.

Have you encountered a bogus credit offer? We’d like to hear about it. Leave us a comment or file a complaint at Don’t forget to like and share this information with others. Follow BCA on Facebook for scam alerts, tips, and more.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.