Credit Karma, HomeAdvisor push back after FTC orders both to pay millions

Credit Karma, HomeAdvisor push back after FTC orders both to pay millions

The Federal Trade Commission has imposed millions of dollars in fines on lending services company Credit Karma and leading home services agency HomeAdvisor, accusing the companies of engaging in “deceptive” practices towards consumers.

But both companies are resisting the demands of the federal authority.

In separate announcements Monday, the FTC ordered Credit Karma to pay $3 million for allegedly “using obscure patterns to misrepresent that consumers were ‘pre-approved’ for credit card offers,” and ordered HomeAdvisor to pay up to Paid $7.2 million for alleged engagement in deceptive marketing.

Federal Trade Commission building

Signs are seen at the Federal Trade Commission headquarters in Washington, DC, the United States, August 29, 2020. The agency hit both Credit Karma and HomeAdvisor with multimillion-dollar orders Monday for allegedly engaging in “fraudulent” practices. (REUTERS/Andrew Kelly/File Photo/Reuters Photos)

The FTC said in a press release that it first announced its complaint against Credit Karma in September, accusing the company of telling customers that they were pre-approved for cards and that they had a “90% chance” of tricking them into to apply for offers that, in many cases, ultimately did not qualify them.”

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When contacted by FOX Business for comment, Credit Karma was quick to dismiss the government’s claims, saying in a statement, “We fundamentally disagree with the allegations made by the FTC in its complaint.”

Credit Karma Phone

A silhouette of a woman holding a smartphone with the Credit Karma logo on the screen. The credit services company said the FTC’s claims were “baseless.” (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images)

“We do not participate in so-called ‘dark patterns,’ our agreement with the FTC makes no mention of it, and their suggestion is completely unfounded,” said a Credit Karma spokesman. “There are also no allegations that members have paid any unexpected fees or charges of any kind. We entered into this agreement with the agency simply to keep our focus on helping our members find the right financial products for them.”

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The FTC said its order against HomeAdvisor — linked to Angi, the company formerly known as Angie’s List — was preliminary and stemmed from the agency’s original March 2022 complaint accusing the company of making “false, misleading, or unsubstantiated claims about “Quality and sources” of leads the company sells to service providers who are looking for potential customers.”

Angi Home Services logo

The FTC is seeking millions from HomeAdvisor, an Angi-affiliated company, over allegedly misleading advertising. (Photo illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images/Getty Images)

The commission voted 4-0 to accept the proposed consent agreement against HomeAdvisor and will now accept public comments on the decision for 30 days before deciding whether it is final.

HomeAdvisor also defended itself in its exclusive statement to FOX Business, saying, “We’ve been in business for over 20 years and we don’t and don’t want to fool anyone, let alone customers.”

A company spokesman said the FTC’s announcement simply referred to a settlement agreement that does not admit or find wrongdoing. They noted that the FTC’s own complaint pointed to eight taped sales calls as alleged evidence of the alleged misrepresentations, and if the case had gone to trial, HomeAdvisor would be willing to refute that handful of calls with “thousands of perfectly correct calls.”

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“We’ve earned the privilege of becoming the trusted partner to hundreds of thousands of local plumbers, roofers, general contractors and electricians — the people who help protect Americans’ greatest asset: our homes,” the spokesman added. “Finding homeowners and helping them do their job well is the day-to-day work of our team members, and you won’t find a company that works harder for the American Home Service Provider than Angi.”

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