If you’re shopping for a credit card or loan, the only words sweeter than “You’re approved!” may be, “You’re pre-approved!” But according to the FTC, many people who got “pre-approved” credit offers from Credit Karma weren’t approved for credit and, as a result, wasted time applying and saw their credit scores drop when their applications were denied.

An FTC lawsuit alleges that Credit Karma deceived people by claiming — falsely — that they had been “pre-approved” or had “90% odds” of approval for credit cards or loans offered by banks and lenders that used Credit Karma to promote their financial products.

Under a settlement, Credit Karma will pay $3 million to reimburse people who responded to its allegedly deceptive offers but were ultimately denied credit. The order also prohibits Credit Karma from making misleading claims that people have been or are likely to be approved for credit or loans.

Credit Karma touts online access to credit information and tools. To join, people must give Credit Karma personal information and agree to let it collect financial and other information about them. Credit Karma recommends financial products to its users and is paid by the financial product companies when users get their products.

According to the FTC, Credit Karma sent its users recommendations in the form of deceptive “pre-approved” credit offers from at least February 2018 through April 2021, knowing that users were more likely to respond if they believed their applications would be accepted. But, the FTC says, for many of the supposed offers, nearly a third of the people who applied were rejected by the companies whose product Credit Karma recommended, based on disqualifying financial characteristics, like bankruptcies.

What’s more, the FTC says, the companies’ reviews showed up as hard inquiries on the rejected applicants’ credit reports. A “hard inquiry” indicates that you have applied for credit and can lower your credit score. People also wasted significant time applying for credit cards they weren’t eligible to get, the FTC says.