Did you apply for a credit card because Credit Karma said you were pre-approved, but were declined? If so, you may be entitled to compensation. No seriously. The Federal Trade Commission orders the credit monitoring service to pay users $3 million after shoving pre-approved fake credit cards on customers and damaging their credit. Nearly a third of Credit Karma users who applied for the pre-approved credit cards were later denied, following a credit check. According to a complaint filed by the FTC, the marketing efforts wasted consumers’ time and negatively impacted their credit scores. When a business launches a marketing campaign designed to trick customers into doing certain things, like applying for a pre-approved credit card, for example, they’re engaging in what’s called a “dark pattern.” According to a news article, the FTC cracks down on predatory practices that “harm consumers and pollute online commerce.” Credit Karma allegedly violated the Federal Trade Commission Act between February 2018 and April 2021, promoting products that consumers had a 90% chance of being approved or pre-approved for, but were ultimately turned down. This is an accusation that Credit Karma denies. The company said in a statement that it disagrees with the FTC’s claims, but has reached an agreement so it can start helping customers again, according to a report. According to Credit Karma’s statement, the company only gets paid when users are approved for things like credit cards. However, the FTC’s allegations focus on Credit Karma’s historical use of the term “pre-approved” for a small subset of personal loan and credit card offerings that were available on their website prior to April. 2021 and do not challenge the language of the approval ratings. the company has been supplying its customers ever since. As a result, Credit Karma has agreed to pay $3 million to the FTC, which will be sent to customers who have been harmed by Credit Karma’s predatory practices. The company will also stop misleading customers about credit offer approvals, which will be documented by an order requiring Credit Karma to keep records of its marketing efforts, according to the report. It’s unclear how many customers were affected by the “pre-approved” offers that turned out to be false, or how many each customer can expect to receive as part of the settlement. What Credit Karma has done is really no better than the practices that payday loans have engaged in – although the big difference is that the customers actually didn’t pay anyone any money; they just applied for a “promised” credit card or loan that was declined.