CFPB to Distribute $1.8 Billion in Historic Credit Repair Scheme Settlement | Global News Avenue

Consumer Financial Protection Bureau (CFPB) will distribute $1.8 billion to 4.3 million consumers participating in credit repair programs.

Several credit repair companies, including Lexington Law and CreditRepair.com, will have to pay the largest ever payment to the CFPB’s Victim Relief Fund after the government’s consumer watchdog found customers were charged illegal fees or engaged in alleged deceptive bait-and-switches. The allocated amount of advertising.

Last year, the bureau initially Offer to settle They partnered with the companies after a district court ruled they violated federal law. Following the ruling, the company filed for Chapter 11 bankruptcy protection and shut down 80% of its operations.

The companies allegedly charged for telemarketing credit repair services before providing consumers with proof of promised results. The bureau also accused the companies of using deceptive marketing tactics to encourage consumers to purchase credit repair services.

“Lexington Law and CreditRepair.com exploited vulnerable consumers trying to rebuild their credit by charging them illegal junk fees because they didn’t have one,” CFPB Director Rohit Chopra said in a prepared statement. Provide results.”

The CFPB will issue civil penalty funds and consumer compensation to affected customers starting on December 5. In addition, the companies involved will be banned from engaging in telemarketing credit repair services for 10 years.