The Fall of Lexington Law: A $2.7 Billion CFPB Settlement and Its Aftermath
- Joeziel Vazquez
- Dec 28, 2024
- 9 min read
Updated: Oct 22
Writer: Joeziel Vazquez
CEO & Board Certified Credit Consultant (BCCC, CCSC, CCRS)
Published: Dec 28, 2024 | Last Updated: October 22, 2025
Reading Time: 7 min
In a landmark case that has sent shockwaves through the credit repair industry, the Consumer Financial Protection Bureau (CFPB) secured a historic $2.7 billion judgment against Lexington Law and its network of affiliated companies. This case exposes what federal investigators have dubbed the largest credit repair fraud scheme in American history, revealing how one of the nation's most prominent credit repair organizations systematically deceived hundreds of thousands of consumers who were simply trying to rebuild their financial lives.
The Lexington Law Lawsuit: A Web of Deception
According to court records from the U.S. District Court for the District of Utah (Case No. 2:19-cv-00298-BSJ), Lexington Law orchestrated an elaborate scheme that would eventually lead to their downfall. The CFPB's investigation uncovered a complex network of interconnected companies operating under the Lexington Law umbrella, including:
CreditRepair.com
PGX Holdings
Progrexion Marketing
Progrexion
John C. Heath, Attorney-at-Law PC
These entities worked together in what the CFPB described as a sophisticated scheme to circumvent federal consumer protection laws while targeting vulnerable individuals seeking legitimate credit repair services.
30-Day Free Trial With a Real Ethical Credit Repair Company
In stark contrast to Lexington Law's deceptive practices, there is a better way forward for consumers seeking legitimate credit repair services. Credlocity stands at the forefront of ethical credit repair, offering transparent, consumer-focused solutions that put your financial well-being first.
What Sets Credlocity Apart:
Risk-Free Trial and Guarantees:
30-day free trial to experience our services firsthand
100% Money Back Guarantee for 180 days
No advance fees or hidden charges
Cancel anytime without penalties
Complete transparency in pricing and services
Cutting-Edge Technology:
State-of-the-art "Credit Tracker" mobile app
Real-time credit score monitoring
Instant notifications of credit report changes
Secure document upload and storage
Interactive dashboard for progress tracking
Personalized Support:
Monthly one-on-one phone consultations
Strategic planning sessions with credit experts
Customized credit improvement strategies
Regular progress reviews
Direct access to credit specialists
Comprehensive Services:
Detailed credit report analysis
Custom dispute strategies
Credit score optimization
Educational resources and tools
Long-term credit maintenance guidance
The Credlocity Difference
Unlike companies that have faced legal troubles for deceptive practices, Credlocity is built on a foundation of ethics, transparency, and proven results. Our commitment to consumer protection goes beyond compliance – it's at the core of everything we do. With Credlocity, you're not just getting credit repair services; you're gaining a partner dedicated to your financial success.
Start Your Free 30-Day Trial Today →
Illegal Practices and Consumer Exploitation
The investigation revealed a sophisticated deception campaign that used fake real estate and rent-to-own listings to lure desperate consumers. When potential clients inquired about these non-existent properties, they were told their credit scores were too low – but Lexington Law could help, for a price.
The scale of their operation was staggering, affecting over 700,000 consumers who were charged substantial fees:
Monthly fees ranging from $89.95 to $129.95
"Initial work fees" of $99.95 to $199.90
Processing fees of $19.95 to $29.95
The investigation exposed multiple violations of federal law, including:
Illegal Advance Fees: Lexington Law collected hundreds of millions in illegal advance fees before providing any services
Disclosure Failures: The company failed to make required disclosures to consumers
Misrepresentation: They consistently misrepresented their ability to remove negative items
Advance Payment Demands: Routinely demanded payment before services were rendered
False Promises: Made misleading statements about their ability to remove bankruptcies, judgments, and liens
Contract Violations: Failed to provide required contracts and disclosures to consumers
The Collapse of a Credit Empire
In August 2023, the mighty Lexington Law empire came crashing down. After years of collecting millions from desperate consumers, the credit repair giant filed for Chapter 11 bankruptcy protection in the wake of the devastating $2.7 billion judgment. The collapse was swift and dramatic – within days, the company's bustling offices fell silent, with employees arriving to find locked doors while thousands of clients were left in limbo.
As CFPB Director Rohit Chopra stated, "The collapse was inevitable. A business built on deception cannot stand forever."
The Settlement and Its Devastating Impact
The aftermath of Lexington Law's collapse revealed the true scale of destruction:
Immediate Aftermath:
Hundreds of employees suddenly jobless
Thousands of client accounts abandoned mid-process
Millions in consumer fees lost
Decades of operations vanished overnight
Multiple state investigations launched
Mounting class action lawsuits
CFPB Refund Distribution: What Consumers Need to Know
In a major development, the CFPB is now distributing $1.8 billion in refunds to over 4 million consumers harmed by Lexington Law and CreditRepair.com's illegal practices. The distribution process, managed by JND Legal Administration, runs from December 5, 2024, to January 6, 2025.
Key Points About the Refund Process:
✅ Consumers do not need to take any action to receive their checks
✅ Eligible individuals have been identified through company records
✅ Distribution includes both civil penalty funds and consumer redress
✅ Physical checks will be mailed to eligible consumers
⚠️ Important Scam Warnings
The CFPB has reported multiple scam attempts targeting consumers expecting refund checks. Here are crucial warning signs to watch for:
Common Scam Tactics to Avoid:
❌ Anyone claiming they can "help" you receive funds from the settlement
❌ Requests for banking details or personal information
❌ Demands for upfront fees or gift cards
❌ Offers to "expedite" your check
❌ Requests for social security numbers, birth dates, or credit card information
Remember: You do not need to take any action or pay any fees to receive or cash your refund check. If you receive a suspicious check or communication, contact JND Legal Administration at 1-855-680-8991 (8 am-9 pm, Monday-Friday except Holidays) to verify its legitimacy.
The Settlement and Its Broader Impact
Looking back, several red flags should have alerted consumers to potential issues:
Aggressive marketing tactics
Unrealistic promises of credit score improvements
Demands for upfront payment
Lack of transparency about the credit repair process
Limited or non-existent customer support
Lessons Learned and Moving Forward
The Lexington Law lawsuit serves as a cautionary tale for both consumers and the credit repair industry. It highlights the importance of:
Due diligence when selecting credit repair services
Understanding your rights under federal consumer protection laws
Recognizing the signs of potentially fraudulent credit repair operations
Knowing that legitimate credit repair takes time and effort
Choosing a Legitimate Credit Repair Service
The Lexington Law case highlights the importance of choosing a reputable credit repair company that operates within legal boundaries. Here are key features to look for when selecting a credit repair service:
Consumer Protection Features
✅ No Advance Fees: Legitimate companies never charge upfront fees before services are rendered - it's illegal under federal law
✅ Written Contracts: Reputable services provide detailed, clear contracts outlining all terms and services
✅ Money-Back Guarantee: Look for companies that stand behind their services with strong guarantees
✅ Transparent Pricing: All fees and costs should be clearly disclosed before any commitment
✅ Clear Cancellation Policies: You should have the right to cancel services without penalty
Red Flags to Avoid
🚩 Companies demanding payment before completing any work
🚩 Lack of a clear, written contract
🚩 No clear refund or cancellation policy
🚩 Promises to remove accurate negative information
🚩 Pressure tactics or demands for immediate decision
🚩 Reluctance to explain your legal rights
The Legacy of the Lexington Law Settlement
This landmark case has fundamentally changed the credit repair landscape. The $2.7 billion judgment serves as a powerful deterrent to other companies that might consider similar deceptive practices. It also demonstrates the CFPB's commitment to protecting consumers from predatory financial services.
Getting Help if You Were Affected
If you believe you were impacted by Lexington Law's practices:
Keep all documentation of your interactions with the company
Watch for communications about settlement payments
Contact the CFPB for information about compensation eligibility
Consider filing a complaint if you haven't already done so
Frequently Asked Questions About the Lexington Law Settlement
Am I eligible for the Lexington Law settlement?
You're eligible if you were a Lexington Law or CreditRepair.com customer between 2014-2023 who was:
Illegally charged upfront fees before services were provided
Subjected to deceptive advertising or marketing practices
Promised results that couldn't legally be guaranteed
You don't need to take any action. Eligible consumers have been automatically identified through company records and will receive payment directly from JND Legal Administration.
How much will I get from the Lexington Law settlement?
Refund amounts vary based on:
Total fees you paid to Lexington Law or CreditRepair.com
The length of time you were a customer
The specific violations you experienced
Payments are calculated on a pro-rata basis, meaning the settlement funds are divided proportionally among all eligible consumers. While you may not receive a full refund of all fees paid, additional checks may be sent to consumers who cash their initial checks if funds remain after the first distribution round.
The CFPB is distributing $1.8 billion total to over 4 million affected consumers.
When will I receive my Lexington Law settlement check?
Distribution Timeline:
December 5, 2024 - January 6, 2025: Initial check distribution period
Mid-February 2025: First check reissue date (for lost/damaged checks)
Ongoing: Additional distributions if funds remain after initial round
If you're eligible, you should receive:
A letter notification explaining your eligibility
A physical check mailed to your address on file
Check your mail carefully during this period. If you haven't received your check by late January 2025 and believe you're eligible, contact JND Legal Administration.
What are the best alternatives to Lexington Law after the shutdown?
After Lexington Law's collapse, consumers need trustworthy alternatives. Here are the top options in 2025:
1. Credlocity (Recommended)
A+ BBB Rating with verified ethical practices
30-day free trial with no upfront fees
100% Money Back Guarantee for 180 days
Transparent pricing with no hidden charges
Advanced mobile app with real-time credit monitoring
Monthly one-on-one expert consultations
2. Sky Blue Credit
Flat-rate pricing model
90-day money-back guarantee
BBB accredited
Established reputation since 1989
3. The Credit People
Month-to-month service (no long-term contracts)
First-time customer discount
Personal advocate assigned to your case
4. DIY Credit Repair
Use your legal rights under FCRA to dispute items yourself
Free but time-intensive
Best for consumers with limited negative items
Key Considerations When Choosing:
Verify BBB accreditation and ratings
Confirm they follow CROA regulations (no upfront fees)
Read actual customer reviews, not just testimonials
Understand exactly what services are included
Get everything in writing before committing
Understanding Your Redress Payment
What is a redress payment?A redress payment is compensation for consumers who have been wronged. In this case, the payments are being distributed by JND Legal Administration on behalf of the CFPB to compensate consumers harmed by Lexington Law and CreditRepair.com's illegal practices.
How are payment amounts calculated?Payments are calculated based on a pro-rata share of the fees you paid to CreditRepair.com and Lexington Law. While you may not receive a refund for all fees paid, additional checks may be sent to consumers who cash their initial checks if funds remain after the first distribution.
Check Processing and Verification
Where can I cash my check?You have several options:
At your own bank through:
Online banking application
Local branch teller
ATM deposit
Any Wells Fargo branch (no fee, valid ID required)
Check-cashing services (fees may apply)
Supermarkets or retail establishments that cash checks (fees may apply)
What if I need my check reissued?For lost, damaged, expired checks, or name/address changes:
Submit a request at www.cfpb-lexlaw.org
Email info@cfpb-lexlaw.org with your:
Unique ID
Name
Current address
Or mail your request to:
Lexington Law Matter
c/o JND Legal Administration
P.O. Box 91015
Seattle, WA 98111
Note: Reissues occur approximately every two months, starting mid-February 2025.
Special Circumstances
What if the check is made out to a deceased family member?The check can be reissued to either:
The sole beneficiary of the estate, requiring:
Proof of identity (government-issued ID)
Death certificate
Legal documentation of sole beneficiary status
The estate itself, requiring from the executor:
Death certificate
Proof of identity
Legal documentation of executorship
Submit requests via email to info@cfpb-lexlaw.org or by mail to the address above.
Important Notes
Tax Implications: The payment is considered a refund of fees paid and is unlikely to be taxable. Consult a tax advisor for specific guidance.
Privacy Protection: All information submitted is protected under the Privacy Act and will only be used to process your payment or handle related matters.
No Claims Process: There is no opportunity to file claims for this redress case. All eligible recipients have been identified through company records.
Conclusion
The fall of Lexington Law represents more than just the failure of one company; it marks a turning point in the credit repair industry. This case demonstrates that even well-established organizations cannot escape accountability for deceptive practices. As the CFPB continues to distribute settlement funds to affected consumers, the legacy of this case will likely influence credit repair regulations and enforcement for years to come.
If you're ready to work with an ethical, transparent credit repair company, explore Credlocity's risk-free 30-day trial and experience the difference that honest, effective credit repair can make.
Note: If you believe you may be eligible for compensation as part of the Lexington Law settlement, contact the CFPB or visit their official website for more information about the claims process.