In September 2022, the Federal Trade Commission announced that it had taken action against credit services company Credit Karma for allegedly deploying dark patterns to misrepresent that consumers were “pre-approved” for credit card offers. The FTC alleged that the company used claims that consumers were “pre-approved” and had “90% odds” to entice them to apply for offers that, in many instances, they ultimately did not qualify for.

The agency’s order requires the company to pay $3 million that will be sent to consumers who purportedly wasted time applying for these credit cards and to stop making these types of deceptive claims.

“Credit Karma’s false claims of ‘pre-approval’ cost consumers time and subjected them to unnecessary credit checks,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue its crackdown on digital dark patterns that harm consumers and pollute online commerce.”

Credit Karma provides tools that allow consumers to monitor their credit scores and credit reports. According to the FTC, in order to use Credit Karma’s services, consumers must provide the company with a variety of personal information, allowing Credit Karma to amass over 2,500 data points on each consumer, including credit and income information. Credit Karma uses that information to send targeted advertisements and recommendations for financial products, like credit cards, according to the agency.

The FTC’s proposed complaint alleges that, from...

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