In order to check your credit score and improve the score, you must have come across the names of services like Lexington Law or maybe CreditRepair.com. But before you move forward, just know that there is this Lexington Law Lawsuit going on, and if you don’t know the details of it all. Well, then just keep on reading.
How Did It All Start?
The problem that the article discusses has not appeared suddenly. It refers to the year 2011. For more than a decade, these two companies have been calling people to pitch their services and sign up customers via their telephone sales (telemarketing calls). In the period between 2016 and 2023, there were millions of people who were convinced by these calls to make payments for credit repair services.
In any case, those calls didn’t comply with the legal requirements. The calls were performed against the rules of the federation, and that is the point where the problem started.
The Consumer Financial Protection Bureau (CFPB) took the case to the next level to look into it. As per the CFPB, Lexington Law, as well as its partner firms, were billing clients upfront with no major credit repair work. Hence, this constitutes a direct infringement of the Telemarketing Sales Rule.
Besides that, most companies were discovered to be using deceptive ads. Essentially, they would say one thing and do another when it came to clients.
What Exactly Did They Do Wrong?
Here’s a quick breakdown of the major violations:
Telemarketing Sales Rule Violation: It is not legal for credit repair companies to receive money before starting the work. After the completion of the work, they should ask for the payment. Lexington Law was not in accordance with the regulation.
Consumer Financial Protection Act Violation: The law forbids lies or fraud. The ads and sales tactics of Lexington Law concealed the true nature of the services that customers were going to receive.
Because of these two violations, the court had to step in.
What Was the Court’s Decision?
In August 2023, a significant decision was made by the court to go against Lexington Law, CreditRepair.com, and their parent companies. The verdict covered a wide range of issues, such as:
- $1.8 billion to be returned to affected consumers.
- $45 million and $18 million in penalties for the two parent companies.
- A 10-year ban on using telemarketing to sell credit repair services.
The companies didn’t stop with that either. They went on to declare bankruptcy following the court decision, which reveals the extent to which the result was significant.
Who’s Getting a Refund?
In case you ever were telecalled, received a referral from a marketing partner, and as a result paid Lexington Law or CreditRepair.com, there is a chance that a refund will be due to you. More specifically, this is a possibility if the payment was made after the call between March 8, 2016, and August 30, 2023, or after the referral between July 21, 2011, and August 30, 2023.
Over 4.3 million people are set to receive checks.
The timeframe for the refund to be recognized and thus prevent any inconveniences to the customers began on December 5, 2024, and will go on until January 6, 2025. There will be no paperwork or requests for the refund. The recipients will receive a check in the mail if they are on the list.
Is It a Scam?
If you are considering whether this money back is genuine, that sounds reasonable. However, it is legit.
JND Legal Administration, the official administrator operating with the CFPB, is the one sending the checks.
Nonetheless, be alert. In case you get a request from someone who wants you to give them some personal details like your bank information, your Social Security number, or a so-called “processing fee”, this is a fraudulent message. It is not necessary for you to pay in order to get your refund.