The Consumer Financial Protection Bureau filed lawsuits this month against Lexington Law and Creditrepair.com, two of the largest credit repair companies.
The suit claims that the companies illegally charged customers for credit repair services in violation of federal rules on telemarketing sales. Under that rule, telemarketers may charge fees for repair services only after showing that their promised results were delivered.
The lawsuit also claims that several companies, under the name Progrexion, used deceptive marketing to lure in clients, violating the Consumer Financial Protection Act. In one example cited by the lawsuit, Progrexion advertised that it guaranteed “ANYONE a 0-3.5% Down Home Loan no matter how bad their Credit is when we start!”
“Lexington and Progrexion have helped millions of consumers ensure their credit reports are fair, accurate and substantiated,” a spokesman for Progrexion and Creditrepair.com said in a statement to The New York Times. “We take the trust and confidence consumers place in us very seriously, we disagree with the allegations in the complaint, and we will vigorously defend ourselves and the valued services we provide.”
CBS News reported that credit reporting, credit repair services or other personal consumer complaints accounted for 43 percent of all complaints to the CFPB in 2018. That number was only 23 percent in 2016.
Andrew Pizor, a lawyer with the National Consumer Law Center, warned against paying for credit repair.
“Avoid it completely,” he told The New York Times. “Anything a credit repair company can do — including disputing inaccurate information found on your credit report — people can do themselves, at no cost.”
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