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

The Federal Trade Commission imposed multimillion-dollar fines on credit service provider Credit Karma and HomeAdvisor, the leading home services agency, alleging the companies were each involved in “deceptive” practices against consumers.

But both companies are resisting the federal agency’s claims.

In separate announcements on Monday, the FTC ordered Credit Karma to pay out $3 million for its alleged use of “dark patterns to misrepresent that consumers were ‘pre-approved’ for credit card offers,” and ordered HomeAdvisor to pay a whopping $7,000. 2 million to pay for allegedly engaging in misleading marketing.

Building of the Federal Trade Commission

Signage is on display at the Federal Trade Commission’s headquarters in Washington, DC, U.S., August 29, 2020. The agency hit both Credit Karma and HomeAdvisor with multimillion-dollar orders on Monday alleging “deceptive” 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 they were pre-approved for cards and had a “90% chance” of luring them into offerings. to apply for those, in many cases they ended up being ineligible.”

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When contacted by FOX Business for comment, Credit Karma quickly dismissed the government’s claims, saying in a statement, “We fundamentally disagree with the allegations made by the FTC in their complaint.”

credit karma phone

A woman’s silhouette holds a smartphone with the Credit Karma logo on the screen. The credit service provider said the FTC’s claims are “baseless.” (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images)

“We are not concerned with so-called ‘dark patterns,’ they are not mentioned at all in our agreement with the FTC, and their suggestion is completely baseless,” said a spokesperson for Credit Karma. “There are also no allegations that members have paid unexpected fees or charges of any kind. We reached this agreement with the agency simply to keep our focus on helping our members find the financial products they need that suit them.”

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The FTC said the injunction against HomeAdvisor — affiliated with Angi, the company formerly known as Angie’s List — is preliminary and stems from the agency’s original March 2022 complaint alleging the company made “false, misleading or unsubstantiated claims about the quality and sources of the leads the company sells to service providers looking for potential customers.”

Angi home services logo

The FTC is suing HomeAdvisor, an Angi-affiliated company, for millions for allegedly deceptive marketing. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images/Getty Images)

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

HomeAdvisor also defended itself in its exclusive statement to FOX Business, saying, “We’ve been in business for over 20 years and will not cheat anyone, let alone customers.”

A spokesperson for the company said the FTC’s announcement simply pertains to a settlement agreement that does not admit or establish wrongdoing. They noted that the FTC’s own complaint pointed to eight taped sales calls as alleged evidence of the alleged misrepresentation, and if the case had gone to trial, HomeAdvisor was prepared to counter that handful of calls with “thousands of perfectly accurate phone calls”.

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“We have earned the privilege of becoming trusted partners of hundreds of thousands of local plumbers, roofers, general contractors and electricians – the people who help protect Americans’ greatest asset: our homes,” the spokesperson added. “Finding and helping homeowners get their jobs done right 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 professional than Angi.”

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