Millions of Americans will soon receive refund checks for allegedly being scammed out of their money by credit repair companies. The Consumer Financial Protection Bureau (CFPB) is overseeing the distribution of refunds after winning a lawsuit against major credit repair firms, including Lexington Law and CreditRepair.com.
The CFPB found that these companies charged illegal advance fees or used deceptive advertising tactics to deceive consumers trying to rebuild their credit. The bureau is paying out $1.8 billion in refunds to 4.3 million victims, the largest-ever distribution from its Civil Penalty Fund.
Eligible consumers who were harmed by CreditRepair.com, Lexington Law, and their parent companies between 2011 and 2023 will receive refunds. No action is needed to receive a refund check, which could total hundreds of dollars per person.
Refunds are expected to be mailed by January 5, 2025, but recipients should cash them quickly before they expire on April 6, 2025. If initial distributions aren’t completed, additional checks may be sent to those who have already received a payment.
The affected companies have filed for bankruptcy protection, according to the CFPB. This refund is welcome news for older adults struggling with debt, particularly as debt has increased significantly in recent years.
Source: https://www.aarp.org/money/budgeting-saving/info-2024