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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’ve hired both LexingtonLaw and Credit Repair. They both promised results and demanded payment up front to get started.
I got a call from LexingtonLaw about my credit not knowing how they knew I had bad credit but I did need to fix it so I started paying them about 150 a month then I noticed on my bank statement that they had charged me multiple times within the month so I contacted them to see what my credit score was that it hadn’t changed so I tried to cancel it they didn’t cancel it they just charged me again and again and then finally I canceled my whole entire bank so they could stop charging me then I received an email stating they were in a lawsuit now I’m just wondering what I should do
I hired Lexington law because my credit report needed some work and they told me I would pay monthly and see results. My score never once changed. And I wasted two years of charges for nothing. I want my money back from them
I’ve been using them for years and just got email today about this, I need to be added to this lawsuit.
I tried to use Lexington Law to better my situation. They told me to quit paying on my loans and they would take care of it. I started to pay them monthly. By the time I realized they were not making any of my payments, it was too late. In a nutshell, I asked for my money back. After my credit score went down 150 points. And I still have a $14000 loan on my credit haunting me after quite a few years.
Hired Lexington Law Firm, said I had to pay 1st then they work on collections. Took money, made credit report worse by contacting these collection companies and credit scores went worse!
I hired Lexington LAW in the past to repair my credit, but after several months of making payments no progress was made at all!! My score didn’t go up, and neither was I ever advised of any forward progress whatsoever! NEVER will use them again!!
I used them in the past and I feel like it was a rip off
I started using Lexington Law in the beginning of 2021 and I canceled them a year later, 2022. After all the money I paid them every month, my credit score didn’t improve AT ALL. When I called to cancel my services I asked her what my credit score was when I started with them versus what it was at that time I was cancelling. The difference was 2 points. On top of this, I had made sure I hadn’t done anything on my end to make my score drop bc I know how important that is during the credit repair journey. That was a huge waste of money for me
I had Lexington Law for 4 years and they didn’t even touch mine or my husband’s credit scores.
Paid Lexington law and my score never changed. I was duped and I want to join law suit