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CFPB judgment overview:
- Who: The Consumer Financial Protection Bureau is seeking a $3.1 billion judgment against credit repair companies.
- Why: The CFPB says Lexington Law and CreditRepair.com wrongfully charged consumers fees for credit repair services.
- Where: The CFPB lawsuit was filed in Utah federal court.
The Consumer Financial Protection Bureau (CFPB) is asking a Utah federal judge to order credit repair companies to pay more than $3.1 billion in redress for consumers who were allegedly illegally charged for credit repair services.
On Tuesday, the CFPB filed a motion seeking a $3.1 billion CFPB judgment on behalf of consumers that the credit repair companies Lexington Law and CreditRepair.com allegedly wrongfully charged.
“Between March 8, 2016, and March 31, 2023, defendants took approximately $3.1 billion from more than four million consumers in violation of the Telemarketing Sales Rule,” the CFPB wrote in its motion.
“The time has come for defendants to return that money to the consumers they unlawfully charged, cease their illegal billing practices, and pay penalties for their misconduct.”
Credit repair companies’ billing practices violate federal law, CFPB says
The CFPB alleges the credit repair companies charge two types of fees: a $15 fee when the consumer signs up for services and recurring fees that kick in within about two weeks and recur monthly.
The CFPB’s motion notes federal law requires credit repair companies to show that they have achieved results before charging clients. The bureau says the law empowers consumers to withhold payments when credit repair is not achieved.
The defendant companies allegedly failed to comply with federal law and deprived consumers of the ability to withhold payment.
“Instead, defendants charged these consumers, many of whom were highly financially vulnerable, hundreds of dollars in illegal upfront fees,” the CFPB’s motion says.
The CFPB estimates the defendants’ customers will pay millions of dollars in credit repair fees each month the credit repair companies continue their unlawful billing practices.
If the judge grants the CFPB’s motion, the $3.1 billion judgment would be the bureau’s largest in a contested action.
Last summer, Equifax was hit with a class action lawsuit alleging it provided lenders with inaccurate credit scores for consumers who were applying for credit.
If you hired a debt-consolidation company, credit repair agency or debt settlement company that made unkept promises or charged you before performing services, you may have a legal claim.
The CFPB is represented by Maureen Mcowen, Kevin E. Friedl, Jonathan Reischl, Tracy L. Hilmer and Alicia Ferrara.
The credit repair companies lawsuit is Bureau of Consumer Financial Protection v. Progrexion Marketing, et al., Case No. 2:19-cv-00298, in the U.S. District Court for the District of Utah.
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114 thoughts onCFPB seeks $3.1B judgment against credit repair companies it claims unlawfully charged consumers
I used them and they payments went up without me knowing. They aren’t right
I used LexingtonLaw on multiple occasions and the same result. I thought it was something I was not doing the whole time.
Thank God for this amazing turn of events I was rob without a gun by these people not one thing was changed on my credit report not one single thing but the monthly bill continue to charge me automatically.
I paid faithfully and my credit was never fixed.
I started with Lexington Law back in early March of 2023. At first speaking to customer service over the phone about my negative items and how they were going to easily remove them I was excited and relaxed about the process and signed up. I really wanted my credit fix so every TWO WEEKS I would call in ask how’s the process going. I would upload the documents immediately when I would receive it from the original creditor through their upload documents tab on the app and call them right away. I started to find something was a bit off when I would call about one of my original creditor sending the same stall letter and what I should do next on my part they kept saying they’ll just send out another dispute. I ask what was being written on the letter that’s being sent out this round? They would not tell me at all. I was on the premium plan which was $139.99 every month and doing my part! Paying that much every month of course I wanted to know what’s being sent out and what I should’ve done next on my end to get items removed. After that conversation I went through my credit report all over agin and found out they were disputing a positive closed account on my credit report. I NEVER got anything removed while being with them. The inquiry removal letters that I downloaded and printed out didn’t even work. I called the credit bureaus about the inquiry letter and they refused to accept it to remove it off my credit. I wasted my time and money with the hope that because they have been around for so long they would have been the best choice.
I have used Lexington Law back in 2016/2017 . I had to stop using them because they were charging nearly $100 per month and after several months or so, I didn’t see any improvement with my credit . They informed me that I needed a different plan, which was more expensive in order to get better results. Please add me.
I kept paying around $100 per month and nothing happened with my credit. I ended up hiring a personal credit repair person.
I have used Lexington Law. Stopped using them because they were charging to much and nothing was getting completed. Stated I needed a more expensive plan to get better work done.
I had lexington law for over a year about 3 years ago. Nothing changed and charged over $100 a month.
I have had LexingtonLaw for over 6 months and they have been analyzing response for over 3 months and nothing has been changed about it
I paid monthly fee after monthly fee and my repair has never been completed.