On August 28, 2023, the CFPB entered into a proposed settlement with a ring of corporate entities operating some of the largest credit repair brands in the country, including Lexington Law and CreditRepair.com. The agreement follows a ruling from the court that the companies collected illegal advance fees for credit repair services through telemarketing. If approved, the settlement would impose a $2.7 billion judgment against the companies.
Lexington Law and CreditRepair.com are the largest credit repair brands in the US. The credit repair services are marketed and offered through a web of related entities in the Salt Lake City area and according to the CFPB, the companies had more than 4 million customers who were subjected to telemarketing during the time period relevant to the lawsuit.
In March 2023, the district court ruled that the defendants violated the advance fee provision of the Telemarketing Sales Rule. If entered by the court, the settlement will, among other things:
Ban the perpetrators from telemarketing for 10 years;
Require notices to consumers, including the CFPB settlement, CFPB’s lawsuit, the court’s summary judgment holding, the consumer’s right to cancel their credit repair services, and the process for canceling the service;
Impose a $2.7 billion judgment for redress; and
Impose more than $64 million in civil penalties - $45.8 million against Progrexion Marketing and $18.4 million against the Heath law firm.
Read the CFPB’s press release here.
