The Federal Trade Commission (FTC) has begun issuing refunds totaling more than $2.5 million to nearly 51,000 consumers who were allegedly misled by deceptive claims from Credit Karma, a credit services company. The action follows a 2022 investigation where the FTC charged Credit Karma with misleading consumers about their chances of qualifying for certain credit cards, a practice the Commission labeled as deceptive.
In the 2022 complaint, the FTC alleged that Credit Karma enticed consumers to apply for credit card offers by asserting that they were “pre-approved” or had “90% odds” of being accepted. These claims, however, were misleading for many applicants who ultimately did not qualify for the credit offers. This practice led to consumer frustration and potential harm to credit scores from unnecessary credit inquiries.
To address these allegations, Credit Karma agreed to an FTC settlement, which required the company to cease its use of such language in credit offers and to pay a settlement amount to compensate affected consumers. The settlement also stipulated the establishment of a fund, which is now being disbursed to the consumers who were affected by these deceptive marketing practices.
The FTC has confirmed that 50,994 consumers who submitted valid claims before the March 4, 2024, deadline are now receiving their refunds. Payments are being made in two forms: by mailed checks and through PayPal deposits. Consumers who opted for paper checks are encouraged to cash them within 90 days, while those receiving PayPal payments are advised to redeem their funds within 30 days.
For those with questions about their refunds or the claim process, the FTC directs consumers to contact JND Legal Administration, the organization handling the refund distribution, at 866-848-0871. Alternatively, the FTC website provides answers to frequently asked questions about the refund process, helping recipients navigate any uncertainties regarding their payments.
The FTC reminds the public that it does not require recipients to provide additional personal information or pay any fees to receive their refunds. This caution aims to protect consumers from potential scams or phishing attempts targeting those expecting payments.
According to FTC data, the agency’s consumer protection efforts in 2023 led to the distribution of $330 million in refunds across various cases. The FTC provides detailed, interactive dashboards on its website, showing a breakdown of refund distribution by state, offering transparency in its consumer refund activities.
For further information about the Credit Karma refund process, consumers can visit the FTC’s website, where they can access resources and review additional details on past and ongoing refund actions.
