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

195 点作者 fairytalemtg超过 2 年前

12 条评论

systoll超过 2 年前
It’s a weird case IMO — CreditKarma played a role but it seems like all the actual harm was elsewhere.<p>1. The Criteria are given by the banks via &#x27;Lightbox&#x27;. If they were misrepresenting those criteria, it seems like the harm was to the banks, but this isn&#x27;t mentioned. And if they couldn’t express their criteria via lightbox and used it anyway… again it seems like that’s mostly on the banks.<p>2. I suspect these estimates were better than nothing, which is basically what bank websites usually give you before you apply.<p>3. CreditKarma isn’t making the applications. The lenders are the ones forcing a &#x27;hard pull&#x27; before telling you if the loan is available to you.<p>4. The credit score companies are the ones that decided that the &#x27;hard pulls&#x27; would reduce people’s credit score for a significant period. Why is this only a problem if they used CreditKarma?<p>5. The new lender is the one rejecting loan applications based on credit score changes caused by the client shopping around. Why is this only a problem if they used CreditKarma?<p>**<p>It seems like there’s a need for a &#x27;credit lock&#x27; that absolutely tanks your credit score <i>while</i> you are being checked, to avoid people applying for multiple lines of credit simultaneously.<p>Having lasting impacts beyond that seems anti-consumer, since it means you’re penalised for shopping around.<p>CreditKarma was an imperfect band-aid over that, but penalising them for that seems like treating the symptoms and not the cause.
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notinfuriated超过 2 年前
Having worked at CK, specifically on personal loans, I&#x27;m going to with Hanlon&#x27;s razor here. (<i>Never attribute to malice that which is adequately explained by stupidity.</i>) Not saying the fine isn&#x27;t warranted, it is.<p>CK was a place where things were so complex (perhaps needlessly) you couldn&#x27;t find anyone to explain what was going on. On this topic, you could ask people on the data team how their models worked (to determine what card or loan offers show to what users) and they seemed to have no idea, they just wanted to put the models in an AB test and see if conversion numbers went up or down.<p>Aside from this, there was plenty of politicking and ambitious people. Not surprised no one was really paying attention to whether or not they were running afoul of any laws. Also, I&#x27;m going to guess they made more than $3M on these mistakes that likely impacted their users&#x27; credit scores negatively.
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charles_kaw超过 2 年前
&gt;The FTC alleges that the company used claims that consumers were pre-approved and had ’90 per cent odds’ to entice them to apply for offers that, in many instances, they ultimately did not qualify for.<p>I believe CK has inside views to the models^ these companies use, and I wouldn&#x27;t be surprised to find that 90% is actually very close to reality. However, I can also see why someone taking a hard credit pull would be very annoyed to be declined.<p>Also, Credit Karma gets paid for successful conversions, and maybe ad placement? It doesn&#x27;t seem like misleading someone got them any profit.<p>This all around seems like a really weird thing to slap this company with - Credit Karma doesn&#x27;t really directly profit^^ from getting this wrong, nor do their partners. Yes, Credit Karma screwed up, but to frame it as &quot;misleading consumers&quot; makes it sound a lot worse than it is.<p>I wonder if there is missing subtext or inside baseball that makes this all make a lot more sense. Regardless, that language <i>does</i> seem misleading, and I&#x27;m glad to see it be turned into something more accurate and informative.<p>^ they seem to have some sort of b2b platform (&quot;lightbox&quot;?) for letting their vendors import their models into credit karma. It&#x27;s probably pretty powerful for a lender to change and simulate new model changes for targeting offers.<p>^^ pissing off your users while not making money is always a bad look
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EnderWT超过 2 年前
More information direct from FTC: <a href="https:&#x2F;&#x2F;www.ftc.gov&#x2F;news-events&#x2F;news&#x2F;press-releases&#x2F;2022&#x2F;09&#x2F;ftc-takes-action-stop-credit-karma-tricking-consumers-allegedly-false-pre-approved-credit-offers" rel="nofollow">https:&#x2F;&#x2F;www.ftc.gov&#x2F;news-events&#x2F;news&#x2F;press-releases&#x2F;2022&#x2F;09&#x2F;...</a>
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avg_dev超过 2 年前
Things I think are worth noting:<p>1. Intuit owns Credit Karma<p>&gt; Intuit has lobbied extensively against the IRS providing taxpayers with free pre-filled forms, as is the norm in developed countries.[108][11][109]<p>- <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Intuit" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Intuit</a><p>2. Intuit owns Mailchimp. Mailchump was hacked earlier this year.<p>&gt; In a scant blog post dated August 12, just two days after the company’s co-founder and long-time CEO Ben Chestnut stepped down, Mailchimp said a recent but undated attack saw threat actors targeting data and information from “crypto-related companies” using phishing and social engineering tactics. A company spokesperson told TechCrunch that 214 Mailchimp accounts were affected by the incident, which comes just months after hackers compromised an internal Mailchimp tool to access information on 300 accounts.<p>- <a href="https:&#x2F;&#x2F;techcrunch.com&#x2F;2022&#x2F;08&#x2F;16&#x2F;digitalocean-emails-mailchimp-breach&#x2F;" rel="nofollow">https:&#x2F;&#x2F;techcrunch.com&#x2F;2022&#x2F;08&#x2F;16&#x2F;digitalocean-emails-mailch...</a><p>I don&#x27;t know for sure but I believe this could have been prevented by the use of hardware U2F tokens, the cost of which is pretty small compared to the consequences of this breach, which affected DO and others.<p>On a personal note, I used to have bad credit, and I grew in the habit of regularly checking my credit score on Credit Karma. They used to send me emails telling me to check my credit score, that my score had fallen, or it had risen, and so on. The emails were unnecessary - it was ingrained in me to check the app on a ~weekly basis. Eventually, I realized that my score had been at an acceptable level for years, and I unsubscribed from the mails, deleted the app off of my phone, and stopped checking. In my opinion, this was predatory behavior, preying on the vulnerabilities and insecurities of people like me or people who had it much worse.<p>To sum up: Intuit is not a good company. They care about making a buck and don&#x27;t care about the consumer; in fact they actively work against the consumer. I don&#x27;t understand why the connection between Mailchimp, Credit Karma, and Intuit is not front and center in all of these articles.
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RileyJames超过 2 年前
&gt;&gt; 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&#x2F;B or multivariate testing, copy testing, surveys, focus groups, interviews, clickstream analysis, eye or mouse tracking studies, heat maps, or session replays or recordings.<p>That’s quite interesting. Presumably they tried to use this as some excuse, or didn’t have the data available to enable the FTC to make a strong assessment as to how many people were presented with a deceptive offer.
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Bud超过 2 年前
All the offers Credit Karma has presented to me have been legit, near as I can tell. I have had no complaints about their app and it has helped me to vastly improve my credit rating. I&#x27;m surprised to see this story.
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colechristensen超过 2 年前
Intuit bought credit karma for 8 billion. For me a parking ticket is orders of magnitude more motivation than this fine.
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ck2超过 2 年前
Can we guesstimate that fine as &quot;days of profit&quot; ?<p>one month? one year?
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causality0超过 2 年前
Fines that are lower than the financial gains may as well be stamps of approval.
LeoPanthera超过 2 年前
I&#x27;ve never seen a website so successfully bypass my adblocker. Both DNS level and browser blockers don&#x27;t seem to make any difference.
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distantaidenn超过 2 年前
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&#x27;ve been planning to return soon, I&#x27;ve been trying to build a history, so when the time comes, I can get a mortgage loan.<p>The process of building a credit history has been enlightening and frustrating. I&#x27;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&#x27;t qualify for any small personal loans. I attempted to get both in order to build a credit history. I mean, I can&#x27;t even get a personal loan for $500.<p>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.<p>However, I am constantly, and I mean constantly flooded with emails with special &quot;pre-approved&quot; credit cards and personal loans. I applied for a couple and of course was rejected. Oh, and of course, when you apply for these &quot;pre-approved&quot; offers, they do a credit check, which for some reason has a negative impact on your credit score.<p>It&#x27;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.
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