CREDIT Karma customers are due compensation from a $3million pot after they were allegedly misled by the site.

The Federal Trade Commission (FTC) this week ordered Credit Karma to compensate customers who applied for credit cards they didn’t get.

Credit Karma is set to pay millions after deceptive claims to lure customers

Credit Karma “tricked” consumers into thinking they were “pre-approved” for credit card offers that they usually did not qualify for, the FTC first claimed in September.

The site allegedly also said customers had 90 percent odds of approval between February 2018 and April 2021.

The FTC announced its first complaints to Credit Karma in September 2022 and ordered the company to stop making the claims.

On Monday, FTC finalized an order to settle charges.

The $3million will be sent to consumers who wasted their time applying.

When consumers applied for these offers, they were subject to a “hard inquiry” on their credit reports, which in “many instances” lowered consumers’ credit scores, the FTC said.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, previously said: “Credit Karma’s false claims of ‘pre-approval’ cost consumers time and subjected them to unnecessary credit checks.

“The FTC will continue its crackdown on digital dark patterns that harm consumers and pollute online commerce.”

However, Credit Karma disputed the FTC’s claims.

It told The U.S. Sun: “We fundamentally disagree with allegations the FTC makes in their complaint, but we reached this agreement to put the matter behind us so we can maintain our focus on helping our members find the financial products that are right for them.”

ARE YOU ELIGIBLE FOR COMPENSATION?

The $3million will be paid out to consumers who signed up for Credit Karma but were denied credit or loans.

The redress requires Credit Karma to pay the sum to the FTC, which will then give the compensation to affected customers.

The FTC hasn’t yet confirmed how many are eligible, how much you can get each nor how the cash will be paid.

We’ll update this story when we hear back.

WHAT TO KNOW ABOUT CREDIT CARDS

A credit card can help you clear debts or spread the cost of a big purchase – but it’s important to be aware of risks.

Firstly, they must be used responsibly or they’ll cost you extra in interest or late payment fees.

You should always aim to pay it off in full each month.

It’s also important not to make several credit card applications in a short amount of time as it’ll only damage your credit score.

If you’re keen, you could get a credit card that offers interest-free purchases.

There are also balance transfer cards that will clear old credit card debts and move them onto a new product where you make interest-free monthly repayments.

You could even earn cashback or other perks when you spend by using a rewards credit card.

We’ve rounded up the top credit cards in our guide.

Read more about how to tackle holiday credit card debt.

The U.S. Sun revealed one of these common credit card mistakes that could be lowering your score.

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