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Tuesday, May 07, 2019
CFPB accuses two of the nation’s largest credit repair companies of tricking and cheating customers
Two of the largest credit companies in the nation illegally charged customers for credit repair services and used deceptive advertising to trick and cheat consumers, theConsumer Financial Protection Bureauclaims.
The CFPB this week filed a lawsuit againstCreditRepair.comandLexington Law, which the bureau claims are two of the country’s largest credit repair companies, alleging that the companies violated the Telemarketing Sales Rule by requesting and receiving payment of prohibited upfront fees for credit repair services.
The lawsuit also claims that the companies violated the Consumer Financial Protection Act by making false claims in its ads, or by “substantially assisting” others in doing so.
The lawsuit also names sever other companies, all of which are either related to or associated with the consumer-facing outlets CreditRepair.com and Lexington Law.
The CFPB lawsuit namesPGX Holdingsand subsidiariesProgrexion Marketing,Progrexion Teleservices,eFolks, and CreditRepair.com; and againstJohn C. Heath, Attorney at Law, which does business as Lexington Law.
The companies’ relationships are complicated with different subsidiaries performing operations on behalf of other companies, and in the case of Lexington Law, Progrexion conducts most of Lexington Law’s core business operations, but Heath, operating asLexington Law Firm, serves as the face of Lexington Law, according to the CFPB.
The companies also allegedly use each other as lead-generation outlets for credit repair services, and that, according to the CFPB, is where the issues begin.
“Defendants operate two of the largest credit repair companies in the country, Lexington Law and CreditRepair.com. They market their services through various media, including online and over the telephone, offering to help consumers remove negative information from their credit reports and improve their credit scores,” the CFPB said in its lawsuit.
“Consumers sign up for Defendants’ credit repair services and pay hundreds of dollars in fees seeking to improve their credit scores and get better access to credit products, on better terms,” the CFPB continued.
To generate business, the companies allegedly use a network of marketing affiliates that advertise a variety of products and services, often related to consumer credit products, the CFPB said.
But that advertising isn’t always on the up and up, the CFPB claims.
“Progrexion’s marketing affiliates have used deceptive, bait advertising to generate referrals to Lexington Law’s credit repair service,” the CFPB said.