CFPB reaches $2.7B settlement with credit repair firms

The Consumer Financial Protection Bureau reached a proposed settlement with a group of companies that operated some of the largest credit repair brands in the country, including Lexington Law and CreditRepair.com, the agency said on Monday.
The agreement followed a March 2023 ruling from a Federal district court in Utah that the companies had collected illegal advance fees for credit repair services through telemarketing in violation of federal law. If the settlement is approved, the companies would be ordered to pay a $2.7B judgment.
The court ruled that the companies violated the advance fee provision of the Telemarketing Sales Rule, which provides for a range of protections for consumers. It requires that credit repair companies wait until six months after they provide the consumer with proof showing that the promised results were achieved before they request or receive payment from the consumer.