The Credit Karma settlement offers a chance for 500,000 consumers to claim a portion of the $3 million fund. Individuals who received pre-approved credit card offers from Credit Karma but were subsequently denied approval after applying may be eligible for compensation.
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Credit Karma Settlement Payout Per Person
The FTC announced a settlement with Credit Karma for $3 million. The settlement stemmed from allegations that Credit Karma misled consumers with deceptive “pre-approved” offers for credit cards and other financial products.
The exact payout per person depends on the total number of claims filed. The FTC estimated that if all eligible individuals filed claims, the individual payouts would be around $6 each.
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Credit Karma Settlement Payout Eligibility
You might have been eligible to file a claim for the Credit Karma settlement if you meet all of the following criteria according to the FTC:
Who may be eligible:
- Saw a “pre-approved” or “high chance of approval” offer on Credit Karma between February 2018 and April 2021. This could have been for a credit card, loan, or other financial product.
- Applied for the credit product based on the offer.
- Were ultimately denied credit after applying.
What you need to prove:
- Evidence of receiving a “pre-approved” or “high odds of approval” offer from Credit Karma. This could be an email, screenshot, or other documentation.
- Proof of being denied credit after applying for a credit card through Credit Karma. This could be a denial letter, email, or other documentation from the credit card issuer.
- The FTC may request additional information to verify your claim.
- The settlement fund will be divided among all eligible claimants, so individual payouts may vary depending on the number of claims filed.
Credit Karma Settlement Payout Amount
The Credit Karma settlement, finalised in September 2022 by the FTC, aimed to compensate consumers misled by “pre-approved” credit card offers.
While the settlement offered potential payouts, the actual amount received by each individual depended on several factors.
Total Settlement Amount:
- $3 million was allocated by Credit Karma to settle the FTC’s claims.
Payout Per Person:
- This was never a fixed amount. It depended on the total number of claims filed.
- The FTC estimated that if all eligible individuals submitted claims, the individual payout would be around $6.
Factors affecting Individual Payouts for Credit Karma Settlement
The factors affecting the Credit Karma settlement payout amount are:
- Total Number of Claims Filed: This is the key element determining the individual payout for each eligible consumer.
- The total settlement amount of $3 million is a fixed sum. When a large number of eligible individuals file claims, the available funds are divided amongst more people.
- This results in a smaller payout per person. Conversely, if fewer claims are filed, the individual payout could potentially be higher.
- Claim Verification: Only verified claims were considered for payout, potentially increasing the individual amount for those whose claims were validated.
- High Number of Claims: This scenario leads to a lower payout per person. With more claims, the total settlement amount is spread across a larger pool of eligible individuals.
Distribution of Credit Karma Settlement Payment
The Federal Trade Commission (FTC) typically keeps specific distribution formulas for settlements confidential. However, drawing from past settlements and general practices, we can infer certain procedures:
- Claim verification: The FTC begins by verifying the validity of all submitted claims.
- Claim categorization: Claims are categorised based on factors like strength and legitimacy.
- Distribution formula: A predetermined formula is utilised to distribute settlement funds among different claim categories, considering factors such as claim volume and strength.
- Individual payout calculation: Eligible claimants within each category receive a portion of the allocated funds, with adjustments possible based on individual claim details.
What if your Credit Karma Settlement Payout is denied?
Possible Reasons for Denial After Deadline:
- Late Submission: The most likely reason for denial after the deadline is simply filing the claim past the designated time frame.
- Incomplete or Inaccurate Information: If your claim lacked necessary documentation or contained errors, it might be denied even if submitted before the deadline.
What You Can Do (Limited Options):
- Review Denial Notice: Carefully examine the denial notice you receive. It should explain the specific reason for the denial.
- Contact Claims Administrator: In rare cases, there might be a small window to rectify errors or missing information if the deadline misstep wasn’t shocking.
- However, contacting the claims administrator is a long shot, and success depends entirely on the specific circumstances and the claims administrator’s discretion.
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