Millions hurt by credit repair firms to share $1.8 billion in refunds

More than 4 million Americans gouged by credit repair companies including Lexington Law and CreditRepair.com will soon collectively receive $1.8 billion in refund checks, the Consumer Financial Protection Bureau announced Thursday.
The payments make up the biggest distribution yet from the CFPB’s victims relief fund, financed by civil penalties paid by companies that violate consumer protection laws, the agency said.
Checks will be mailed in coming weeks to 4.3 million consumers who were charged illegal advance fees or subjected to allegedly deceptive bait-and-switch advertising by Lexington Law, CreditRepair.com and their parent companies, according to the federal agency.
The CFPB in August 2023 obtained a legal judgment against the credit repair businesses, with a district court ruling the companies had violated a law that prohibits such companies from collecting fees until at least six months after their promised results.
The companies filed for Chapter 11 bankruptcy protection after the court ruling, shutting about 80% of their business operations, including telemarketing call centers.