What happened to Lexington Law and CreditRepair.com

The short version

In August 2023 a federal court entered judgment against Lexington Law, CreditRepair.com, and their parent company Progrexion, in an action brought by the Consumer Financial Protection Bureau. The court found the companies had collected fees before delivering the results they had promised, which the Telemarketing Sales Rule prohibits, and had advertised in a way the Bureau alleged was deceptive under the Consumer Financial Protection Act.

The judgment was approximately $2.7 billion. The companies then filed for Chapter 11 bankruptcy protection and told the court they had shut down a large majority of the business, including their call centres, and laid off roughly 900 employees.

The Bureau has since been returning money to people who paid those fees — approximately $1.8 billion distributed to about 4.3 million consumers, which the Bureau describes as the largest distribution in the history of its victims relief fund. A second round of roughly $117 million was allocated to the same matter, with those payments mailing from late September through October 2026.

What the advance-fee rule actually says

The Telemarketing Sales Rule bars a credit-repair seller from taking payment until it has delivered the result it promised, and until it has given the customer a credit report issued more than six months after that result was achieved. The rule exists because the alternative — pay now, wait and see — puts all of the risk on the person with the damaged credit and none on the seller.

That is a rule about the timing of payment, not about whether credit repair is legitimate. A company can charge for helping someone dispute inaccurate information. What it cannot do is take an advance fee for a future outcome it has not yet produced.

If you were a customer

The Bureau collected mailing addresses and harm amounts for affected consumers as part of the case, so eligible people are identified from the companies’ own records rather than by applying. Payments have gone out in rounds.

Two practical notes. First, you do not have to pay anyone to receive money from a regulator’s redress fund — if someone offers to recover your settlement for a fee, that offer is not coming from the Bureau. Second, the Bureau publishes the administrator’s contact details on its own site, which is the place to verify that a cheque or letter is genuine before acting on it.

Why this matters even if you were never a customer

These two brands sat at the top of essentially every "best credit repair" list for a decade. Much of the advertising style the industry still copies — the urgency, the outcome-forward promises, the fee collected at signup — traces back to the model that produced this case.

It is a useful filter when you are evaluating anyone in this category. A company that promises a specific score increase, that tells you it can remove accurate information, or that wants a substantial payment before it has done anything, is describing a model a federal court has already ruled on.

• Nobody can lawfully promise to remove accurate, timely information from your report.
• Nobody can guarantee a specific score change, because the bureaus and the furnishers decide the outcome.
• You are entitled to dispute anything you believe is inaccurate yourself, directly, at no cost.

What you can do instead, for nothing

The Fair Credit Reporting Act gives you the right to dispute information you believe is inaccurate, directly with the credit bureaus and with the companies that furnished it, at no cost and without anyone’s help. That right does not expire and cannot be sold to you.

Software — ours included — can make that faster by reading the report and drafting the letters. It cannot give you a right you already have, and any tool that implies otherwise is selling you something you own.

This article is a summary of a public enforcement action and of what the statute provides. It is not legal advice, and it is a description of how the rules work rather than guidance about your own situation. If money is at stake for you specifically, a consumer-finance attorney is the right person to ask.