Credit Karma, LLC; Analysis of Proposed Consent Order To Aid Public Comment, 54505-54506 [2022-19108]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 87, Number 171 (Tuesday, September 6, 2022)]
[Notices]
[Pages 54505-54506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19108]


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FEDERAL TRADE COMMISSION

[File No. 202 3138]


Credit Karma, LLC; Analysis of Proposed Consent Order To Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement; request for comment.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis of Proposed Consent Order to Aid 
Public Comment describes both the allegations in the draft complaint 
and the terms of the consent order--embodied in the consent agreement--
that would settle these allegations.

DATES: Comments must be received on or before October 6, 2022.

ADDRESSES: Interested parties may file comments online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write ``Credit Karma, 
LLC, LLC; File No. 202 3138'' on your comment and file your comment 
online at https://www.regulations.gov by following the instructions on 
the web-based form. If you prefer to file your comment on paper, please 
mail your comment to the following address: Federal Trade Commission, 
Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 
(Annex D), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Evan Zullow (202-326-2914), Bureau of 
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue 
NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of 30 days. The following 
Analysis to Aid Public Comment describes the terms of the consent 
agreement and the allegations in the complaint. An electronic copy of 
the full text of the consent agreement package can be obtained at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before October 6, 2022. 
Write ``Credit Karma, LLC; File No. 202 3138'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov website.
    Because of heightened security screening, postal mail addressed to 
the Commission will be subject to delay. We strongly encourage you to 
submit your comments online through the https://www.regulations.gov 
website.
    If you prefer to file your comment on paper, write ``Credit Karma, 
LLC; File No. 202 3138'' on your comment and on the envelope, and mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex D), 
Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include sensitive 
personal information, such as your or anyone else's Social Security 
number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including competitively sensitive information such 
as costs, sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the https://www.regulations.gov website--as legally 
required by FTC Rule 4.9(b)--we cannot redact or remove your comment 
from that website, unless you submit a confidentiality request that 
meets the requirements for such treatment under FTC Rule 4.9(c), and 
the General Counsel grants that request.

[[Page 54506]]

    Visit the FTC website at https://www.ftc.gov to read this document 
and the news release describing the proposed settlement. The FTC Act 
and other laws the Commission administers permit the collection of 
public comments to consider and use in this proceeding, as appropriate. 
The Commission will consider all timely and responsive public comments 
that it receives on or before October 6, 2022. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, an agreement containing a consent 
order from Credit Karma, LLC (``Respondent''). The proposed consent 
order has been placed on the public record for 30 days for receipt of 
comments from interested persons. Comments received during this period 
will become part of the public record. After 30 days, the Commission 
will again review the agreement and the comments received and will 
decide whether it should withdraw from the agreement or make final the 
agreement's proposed order.
    This matter involves Respondent's advertisements and 
recommendations for third-party financial products. According to the 
complaint, between February 2018 and April 2021, through its website, 
mobile app, and email marketing campaigns, Respondent has represented 
in advertisements and recommendations that consumers have been ``pre-
approved'' for third-party financial products, such as credit cards. 
Despite these preapproval claims, financial product companies have not 
already approved these consumers. In fact, as alleged in the complaint, 
for many of these offers, almost a third of consumers who received and 
applied for ``pre-approved'' offers were subsequently denied based on 
the financial product companies' underwriting review. The complaint 
further alleges that Respondent knew that its prominent pre-approval 
claims conveyed false ``certainty'' to consumers and employed it 
deliberately to influence consumers' behavior. To the extent Respondent 
revealed that consumers' likelihood of getting approval was anything 
less than certain, it has done so by making additional false claims 
that consumers' likelihood of approval is 90%, or by using buried 
disclaimers.
    The proposed consent order contains provisions designed to prevent 
Respondent from making deceptive claims about approval, pre-approval, 
or consumers' approval likelihood or odds in the future. Part I 
prohibits misleading or unsubstantiated claims about approval, 
including pre-approval, as well as a consumer's odds or likelihood of 
being approved. Part II requires Respondent to pay $3,000,000 in 
monetary relief. Part III contains additional requirements regarding 
the monetary relief. Part IV requires Respondent to provide sufficient 
customer information to enable the Commission to administer consumer 
redress.
    Parts V through VI are reporting and compliance provisions. Part V 
requires Respondent to acknowledge receipt of the order, to provide a 
copy of the order to certain current and future principals, officers, 
directors, and employees, and to obtain an acknowledgement from each 
such person that they have received a copy of the order. Part VI 
requires Respondents to file a compliance report within one year after 
the order becomes final and to notify the Commission within 14 days of 
certain changes that would affect compliance with the order. Part VII 
requires Respondent to maintain certain records, including records 
necessary to demonstrate compliance with the order. Part VIII requires 
Respondents to submit additional compliance reports when requested by 
the Commission and to permit the Commission or its representatives to 
interview Respondents' personnel.
    Finally, Part IX is a ``sunset'' provision, terminating the order 
after twenty (20) years, with certain exceptions.
    The purpose of this analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Joel Christie,
Acting Secretary.
[FR Doc. 2022-19108 Filed 9-2-22; 8:45 am]
BILLING CODE 6750-01-P