On September 1, the FTC issued an administrative complaint and consent order alleging that a credit services company harmed consumers by making false claims of “pre-approved” credit offers, enticing many consumers to apply for offers they ultimately did not qualify for and unnecessary credit checks.
According to the complaint, the company violated Section 5 of the FTC Act and harmed consumers by:
Misleading “Pre-Approval” Claims: The company allegedly made false claims that consumers were pre-approved for certain credit offers and buried the possibility of denial in disclaimers or claims that they had “90% odds” of approval. Despite these claims, the FTC’s investigation revealed that almost a third of consumers who applied in response to the pre-approval claims were ultimately denied. The FTC also cited material in company’s own customer service training materials as evidence that it was aware that its consumers were in fact misled—e.g. by identifying as a common issue representatives would encounter, “I was declined for a pre-approved credit card offer…How is that possible?!?!?!”
Deceptive Dark Patterns: The FTC alleges that the company knew its purported “pre-approved” credit offers misled consumers through the results of consumer testing, and used these results to design manipulative user interfaces—also referred to as deceptive “dark patterns.”
Lowering Credit Score: Consumers were also subjected to “hard” inquiries on their credit reports, which lowered many...
The author and behavioural scientist, Gad Saad, has just published a book on what he calls “suicidal empathy”. He says that “a society dies when it cares more about exhibiting infinite tolerance a...