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Ever been “pre-approved” for a credit card, only to get denied? You might be a part of this Credit Karma settlement. The popular credit monitoring service has been named in a class action lawsuit, and the Federal Trade Commission (FTC) wants them to pay customers $3 million.
If you’ve used Credit Karma, you might have some Credit Karma settlement money coming (after final approval). But how much can you expect? And when is your money coming? We run through everything you need to know about the Credit Karma settlement.
Why is there a 2022 Credit Karma settlement?
The FTC took issue with Credit Karma’s advertising between February 2018 and April 2021 — which suggested that users were pre-approved for some of their credit cards. Even though Credit Karma’s ads claimed a 90% chance of being approved for these credit cards, most users who applied were denied.
On top of that, applying for the cards meant that your credit score would go down because of the hard credit inquiries. So users got no card and a lower credit score than before.
How much is the 2022 Credit Karma settlement for?
The FTC and Credit Karma agreed to settle the lawsuit for $3 million — which will get paid out among qualified class members. Even though they’re settling, Credit Karma admitted no wrongdoing. (Well, beyond that — they said they “fundamentally disagree” with the ruling.)
How do I know if I qualify for the 2022 Credit Karma settlement?
If you applied for a “pre-approved” credit card through Credit Karma between February 2018 and April 2021 and were denied, you could have money headed your way.
What do I need to do to claim the settlement?
If you qualify, you don’t need to do anything to get your money — for now. Credit Karma has been ordered to provide the FTC with a list of every person that qualified for the settlement.
So after final approval in October 2022, the FTC will contact you via email about the following steps to get your money.
How much will I get paid?
If you qualify, you’ll get a portion of the $3 million settlement, but how much remains to be seen. Although there are over 100 million Credit Karma users, only a fraction of those applied for credit cards during this period. But regardless, don’t expect payments large enough to buy you an Amazon Echo.
When will I get my Credit Karma settlement payment?
Right now, the settlement is in the public comment process. So between Sept. 6 and Oct. 6, 2022, the public can make a public comment on the terms of the settlement.
After Oct. 6, the courts decide if the settlement gets final approval. Then Credit Karma has eight days to transfer the money to the FTC, who will distribute the payout to users.
We don’t know an exact date when they’ll start sending money, but based on past class action settlements, you should expect it around the start of 2023.
How will I get paid?
We don’t know exactly how you’ll get paid, but the FTC will give more information when they reach out to qualified Credit Karma users. (And we’ll be watching, too.)
In the meantime, you’ll want to check out our full list of class action settlements to see if you’re owed any additional money.