The Consumer Financial Protection Bureau filed two lawsuits against two of the largest credit repair companies (Lexington Law, CreditRepair.com and various affiliates) in the U.S.

Lexington Law, CreditRepair.com and other affiliates face accusations of engaging in ongoing, unlawful and predatory credit repair practices that can directly affect consumers in the United States and abroad. According to the complaint, the defendants violated multiple consumer protection statutes, including the Consumer Financial Protection Act (CFPA) and the Telemarketing Sales Rule (TSR), by charging consumers unlawful advance fees in connection with credit repair services and by marketing and telemarketing those services through deceptive representations.

According to ACA International CEO Mark Neeb – These companies market their services through telemarketing and media outreach channels to connect with the most vulnerable consumers, giving them false hope that their credit can be magically repaired with the swipe of a pen or excessive payments that do little – if anything — to improve credit scores.

Consumers are better off connecting with creditors to negotiate pay fee schedules that will reduce interest rates allowing consumers to pay off their debt sooner than later. Creditors should be willing to settle with consumers to make payments affordable. If creditors stand their ground consumers can than file bankruptcy and the creditor assume the risk of not getting paid. It would be in the best interest for creditors to allow the consumer to pay the principle with no interest or penalties. Some money is better than no money.

ACA members have reported receiving uninformative and generic (cookie-cutter) “dispute” letters, which many times are disguised as originating from consumers, but mailed in bulk by consumer law firms or credit repair companies, like Lexington Law and its various affiliates.

If something sounds too good to be true, it probably is.

To learn more about this unlawful practice, you can read more about this at ACA International.

To learn about other scams, visit our Fraud & Scams page.