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Credit Karma fined $3M by FTC for misleading consumers with credit card offers

thefintechtimes.com

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Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#31

Post by actually_a_dog »

ajhurliman wrote: post #28
gruez wrote: post #15

Earlier quoted context omitted.

>I wouldn't be surprised to find that 90% is actually very close to reality The FTC press release[1] says "for many offers, almost a third of consumers who applied were in fact denied". That's quite a ways off from 90%. [1] https://www.ftc.gov/news-events/news/press-releases/2022/09/... edit: >Also, Credit Karma gets paid for successful conversions, and maybe ad placement? It doesn't seem like misleading someone got…

If a third of consumers _should_ have been denied because they were not credit-worthy, then there were no errors. You need to look at the false negative rate, not the absolute number of people denied for financial products.

There are no "false negatives." The models implemented by the card issuers are the literal source of truth as to whether a consumer does or does not qualify for the card. Anybody who applied and was rejected did not qualify by definition.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#33

Post by distantaidenn »

I have zero debt. Absolutely zero. However, I left the States soon after graduating university, and thus also have (had) no credit history there. Since I've been planning to return soon, I've been trying to build a history, so when the time comes, I can get a mortgage loan.

The process of building a credit history has been enlightening and frustrating. I'm in the tech world, as most people in this forum is as well. I make a pretty decent salary in said tech world. However, I qualify for zero unsecured credit cards. I also don't qualify for any small personal loans. I attempted to get both in order to build a credit history. I mean, I can't even get a personal loan for $500.

Nothing, nada, zilch. All I can do now is get a secured card and hold on to that for some time -- which is what I have been doing for about a year so far.

However, I am constantly, and I mean constantly flooded with emails with special "pre-approved" credit cards and personal loans. I applied for a couple and of course was rejected. Oh, and of course, when you apply for these "pre-approved" offers, they do a credit check, which for some reason has a negative impact on your credit score.

It's insane that we let 3 companies (Equifax, Experian, and Transunion) control so much of our lives, with little insight as to what their scores actually reflect. CreditKarma is just a vehicle within this sector. The entire system is broken and needs a complete overhaul.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#34

Post by JumpCrisscross »

charles_kaw wrote: post #24
JumpCrisscross wrote: post #17

Earlier quoted context omitted.

> wouldn't be surprised to find that 90% is actually very close to reality I’d be blown away if this is the case. Credit models are carefully guarded. They’re also expensive to run. If Credit Karma could approximate the pricey model with open-source data, they’d have been bought by a bank, not a tax company.

Credit Karma has a platform for running models against their dataset, and appears to buy everyone's daily data from Equifax. Also, Intuit is much more than a tax company now.

> Credit Karma has a platform for running models against their dataset, and appears to buy everyone's daily data from Equifax

There are a lot of people doing this. For the aforementioned reason: a cheap approximation of a credit score is valuable. Before the financial crisis, VantageScore was developed by the credit bureaus to disintermediate Fair Isaac. This work continues, and Credit Karma is far from unique in its approach or data.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#35

Post by [deleted] »

ajhurliman wrote: post #28
gruez wrote: post #15

Earlier quoted context omitted.

>I wouldn't be surprised to find that 90% is actually very close to reality The FTC press release[1] says "for many offers, almost a third of consumers who applied were in fact denied". That's quite a ways off from 90%. [1] https://www.ftc.gov/news-events/news/press-releases/2022/09/... edit: >Also, Credit Karma gets paid for successful conversions, and maybe ad placement? It doesn't seem like misleading someone got…

If a third of consumers _should_ have been denied because they were not credit-worthy, then there were no errors. You need to look at the false negative rate, not the absolute number of people denied for financial products.

[deleted]

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#36

Post by JumpCrisscross »

distantaidenn wrote: post #33

I have zero debt. Absolutely zero. However, I left the States soon after graduating university, and thus also have (had) no credit history there. Since I've been planning to return soon, I've been trying to build a history, so when the time comes, I can get a mortgage loan. The process of building a credit history has been enlightening and frustrating. I'm in the tech world, as most people in this forum is as well. I…

> Nothing, nada, zilch. All I can do now is get a secured card and hold on to that for some time -- which is what I have been doing for about a year so far

I started with a blank credit folio late in life. This was not my experience. It may make sense for you to speak to your bank or to a financial advisor.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#37

Post by JumpCrisscross »

ipsum2 wrote: post #27
RileyJames wrote: post #2

>> Preserve records: To help prevent further use of deceptive dark patterns, the order requires Credit Karma to preserve records of any market, behavioral, or psychological research, or user, customer, or usability testing, including any A/B or multivariate testing, copy testing, surveys, focus groups, interviews, clickstream analysis, eye or mouse tracking studies, heat maps, or session replays or recordings. That’s…

Doesn't this conflict with California Consumer Privacy Act?

> Doesn't this conflict with California Consumer Privacy Act?

The FTC was created by the Federal Trade Commission Act [1], a federal law. That gives it supremacy over California law.

[1] https://en.wikipedia.org/wiki/Federal_Trade_Commission_Act_o...

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#38

Post by kQq9oHeAz6wLLS »

LeoPanthera wrote: post #26

I've never seen a website so successfully bypass my adblocker. Both DNS level and browser blockers don't seem to make any difference.

I believe they're self-hosting the ads, so if you can see the page at all, you'll see the ads.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#39

Post by distantaidenn »

JumpCrisscross wrote: post #36
distantaidenn wrote: post #33

I have zero debt. Absolutely zero. However, I left the States soon after graduating university, and thus also have (had) no credit history there. Since I've been planning to return soon, I've been trying to build a history, so when the time comes, I can get a mortgage loan. The process of building a credit history has been enlightening and frustrating. I'm in the tech world, as most people in this forum is as well. I…

> Nothing, nada, zilch. All I can do now is get a secured card and hold on to that for some time -- which is what I have been doing for about a year so far I started with a blank credit folio late in life. This was not my experience. It may make sense for you to speak to your bank or to a financial advisor.

I'm afraid a lot _might_ have to do with my registered address (zip code) in the States, when I try to apply. Inner city and all that.

Edit: The rejection note that I normally receive is: insufficient credit history.

To me it's a catch-22 situation. It always boggles my mind when I see 20 somethings with 10s of thousands of dollars in credit card and loan debt, while I can't even get in the door. Not saying I plan on having any debt, just that I would like the opportunity to receive a loan when I want it.

Re: Credit Karma fined $3M by FTC for misleading consumers with credit card offers

#40

Post by JumpCrisscross »

distantaidenn wrote: post #39
JumpCrisscross wrote: post #36

Earlier quoted context omitted.

> Nothing, nada, zilch. All I can do now is get a secured card and hold on to that for some time -- which is what I have been doing for about a year so far I started with a blank credit folio late in life. This was not my experience. It may make sense for you to speak to your bank or to a financial advisor.

I'm afraid a lot _might_ have to do with my registered address (zip code) in the States, when I try to apply. Inner city and all that. Edit: The rejection note that I normally receive is: insufficient credit history. To me it's a catch-22 situation. It always boggles my mind when I see 20 somethings with 10s of thousands of dollars in credit card and loan debt, while I can't even get in the door. Not saying I plan on…

> my registered address (zip code) in the States

Are you applying from outside America? Playing devil’s advocate, a college friend skipped paying a bunch of loans by emigrating outside the reach of collectors. It informs why creditors are wary about lending to international clients with whom they have no prior relationship. Hence the advice to work through your bank and financial advisor; they know you, and that relationship builds trust.

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