The Consumer Financial Protection Bureau (CFPB) will soon send refund checks to over 4.3 million Americans who were scammed by credit repair companies including Lexington Law and CreditRepair.com. The payment, totaling $1.8 billion, is the largest distribution yet from the CFPB’s victims relief fund.
The CFPB obtained a court judgment against these companies in August 2023, ruling they violated a law that prohibits collecting fees until results are delivered. The companies filed for bankruptcy protection and shut down about 80% of their operations.
“Lexington Law and CreditRepair.com exploited vulnerable consumers who were trying to rebuild their credit,” said CFPB Director Rohit Chopra. “This historic distribution demonstrates the agency’s commitment to making consumers whole.”
The CFPB has distributed over $3.3 billion in refunds since its launch in 2011, including to victims of student loan and mortgage relief scams, predatory lending, and other illegal practices. The victims’ relief fund allows the CFPB to provide financial relief in cases where compensation from the violating company is not possible.
However, the agency’s efforts are facing challenges, with some Republicans calling for weakening or eliminating the CFPB. Billionaire Elon Musk recently called for deleting the agency, arguing that there are too many duplicative regulatory agencies.
Source: https://finance.yahoo.com/news/millions-hurt-credit-repair-1-213650226.html