CFPB Slams Credit Repair Companies

Credit repair titans face a $2.7 billion settlement with the CFPB for charging customers illegal fees.

A man's hands holding a cell phone with the words "Bad credit? We can hellp!" on the screen.
(Image credit: Getty Images)

The Consumer Financial Protection Bureau (CFPB) settled with some of the largest credit repair companies on Monday, including Lexington Law and This action is the latest example of the CFPB cracking down on the credit repair industry. 

Credit repair companies’ settlement 

The settlement found that the companies charged customers illegal "advance" fees, violating federal laws related to telemarketing. If the settlement is approved, the companies face a $2.7 billion judgment and a ten-year ban on telemarketing credit repair services. 

The settlement comes just as U.S. consumers grapple with record levels of credit card debt.

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“These credit repair giants [ and Lexington Law] used fake real estate and rent-to-own opportunities to illegally bait people and pad their pockets with billions in fees,” said CFPB Director Rohit Chopra in a statement. “This scam is another sign that we must do more to fix the credit reporting and scoring system in our country.”

The companies will also pay $64 million in civil penalties if the settlement goes forward. About four million customers were charged improper fees.

The two credit repair companies are bankrupt

In an ironic twist , the two companies named in the settlement are now themselves bankrupt. 

PGX Holdings, Inc., the parent company of Lexington Law and, secured a $12 million loan in June to help it reorganize in bankrupcy. The Utah-based PGX has stopped monthly billing for about 80% of its customers. The company also laid off 900 of its 1,200 employees.

Could you get compensation?

If you signed up for services through a telemarketing campaign by Lexington Law or, you may be entitled to compensation. The companies are required to reach out to clients who may have been harmed, so be sure to check you mail or email. This notification will also explain how you can cancel services with the companies. 

Given that the PGX companies are in bankrupcy and the proposed settlement is so large, the CFPB may need to tap the Civil Penalty Fund to compensate consumers.

If your credit needs repair

If your credit score has fallen into the "fair" or "bad" categories, you need to take action. A good credit score can save you money on a mortgage or car loan, for example. It's tempting to think that a credit repair company can act as a quick fix for your problems, but many charge money for things you can do yourself. For example, you can check your credit report frequently and contest any inaccurate information. You can contact credit and try to negotiate a payment plan.

If you still want help, look first to non-profit credit counseling organizations. These counseling agencies tend to be more reputable than for-profit credit repair companies. And if you think you may be a victim of a credit repair scam, you may file a complaint with the CFPB.

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Ellen Kennedy
Personal Finance Editor,

Ellen writes and edits personal finance stories, especially on credit cards and related products. She also covers the nexus between sustainability and personal finance. She was a manager and sustainability analyst at Calvert Investments for 15 years, focusing on climate change and consumer staples. She served on the sustainability councils of several Fortune 500 companies and led corporate engagements. Before joining Calvert, Ellen was a program officer for Winrock International, managing loans to alternative energy projects in Latin America. She earned a master’s from the U.C. Berkeley in international relations and Latin America.