By: Tessa Madinson
Federal Trade Commission (FTC) reveals Credit Karma used "dark patterns" to deceive clients into believing they were pre-approved for credit card offers.
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Credit Karma is a finance company that use credit profiles to produce specific offers. It also provides tools to monitor credit scores and reports.
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Customers must provide personal information to use its services. Credit Karma used the data to promote financial products.
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The FTC charged that consumers were misled into believing they had a 90% chance of approval for offers for which they were not qualified.
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FTC Commissioners argued that because the company was deceptive, clients who requested credit reports and were rejected hurt their credit scores.
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Credit Karma violated Section 5 of the FTC Act. Credit Karma deceived clients about approval, wasting time, and harming their credit score.
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FTC Bureau of Consumer Protection will crack down on digital dark practices that hurt consumers and pollute online commerce.
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FTC Senior Public Affairs Specialist said the number of people eligible for refunds wouldn't be released until the Commission finalizes the order which ends Oct. 6.
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A Credit Karma spokesperson said, "to date, less than 1,500 individuals have contacted the company about this issue."
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