Credit Karma Lawsuit: The FTC "Pre-Approved" Settlement, Now Paid Out

What the FTC Alleged

Credit Karma is a financial technology company, owned by Intuit, that shows consumers their credit profiles and recommends credit products. The Federal Trade Commission alleged that between February 2018 and April 2021, Credit Karma used deceptive marketing tactics, telling consumers they were pre-approved or had 90 percent odds of approval for certain credit cards and loans, when in reality nearly a third of consumers who saw these claims were later denied the product.

The FTC alleged Credit Karma disclaimers about the offers were often smaller and less noticeable than the bold pre-approved claims, and that the company knew, based on its own internal A/B testing, that the word pre-approved generated more consumer clicks than more accurate language about approval odds. The agency characterized this as a dark pattern, a design tactic meant to induce consumers to take an action, in this case applying for credit, that was not necessarily in their own best interest.

The Harm the FTC Identified

According to the FTC, consumers who applied based on these false pre-approved claims not only wasted time but often triggered a hard inquiry on their credit report as part of the application process, which can itself cause a temporary drop in a credit score, compounding the harm when the application was then denied.

The FTC finalized a settlement with Credit Karma in January 2023, requiring the company to pay 3 million dollars and to stop making pre-approved or similar approval-odds claims unless it can actually verify them. Credit Karma did not admit wrongdoing as part of the settlement.

Refunds Have Been Issued, With More Still Going Out

The settlement benefited approximately 497,425 consumers who were denied credit after responding to a Credit Karma pre-approved offer. The claim deadline was March 4, 2024, and that window has closed, so no new claims can be submitted today.

The FTC began sending checks and PayPal payments in October 2024, totaling more than 2.3 million dollars in that initial round, and has continued distributing funds since, with total payments exceeding 2.5 million dollars as of the most recent updates. In 2026, the FTC began sending Zelle payments specifically to people who had not cashed their original check or accepted their PayPal payment, ensuring those funds still reach eligible consumers rather than going unclaimed.

How to Get Legal Help

The claim deadline for this settlement was March 4, 2024, and has passed, so no new claims can be filed today. If you already filed a valid claim and have not received your check or PayPal payment, the FTC is now sending Zelle payments to those who did not cash or accept earlier payment methods, so check for a Zelle deposit with a note referencing the settlement.

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