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In recent years, Lexington Law and its parent company PGX Holdings Inc. have come under heavy legal fire. This has led to bankruptcy filings and major regulatory scrutiny from the Consumer Financial Protection Bureau (CFPB). For consumers, this situation is more than just a headline. It highlights the risks in the credit repair industry and what happens when companies mislead the people they claim to help.
At American Legal Shield, we believe in transparency and accountability. In this article, we break down what led to PGX and Lexington Law’s bankruptcy, what the CFPB’s involvement means, and how consumers can protect themselves moving forward.
What Happened with PGX and Lexington Law?
PGX Holdings Inc., the parent company of Lexington Law, CreditRepair.com, and several other credit repair brands, filed for Chapter 11 bankruptcy in 2023. This decision followed a years-long lawsuit from the CFPB alleging unlawful practices in how these companies marketed and sold their services.
The CFPB’s lawsuit, originally filed in 2019, accused PGX and Lexington Law of:
- Deceptive marketing practices
- Charging upfront fees before providing services (a direct violation of federal law)
- Misleading consumers with false promises about improving credit scores
- Violating the Telemarketing Sales Rule (TSR) and Credit Repair Organizations Act (CROA)
This legal pressure played a significant role in the companies’ financial downfall.
The Legal Implications of the CFPB Lawsuit
The CFPB’s enforcement action against PGX and Lexington Law is a landmark case in the credit repair industry. Here’s why it matters.
1. Upfront Fees Are Illegal
Under the CROA and TSR, credit repair companies cannot charge fees before delivering services. The CFPB found that PGX brands routinely collected payments in advance, which violated federal law.
2. False Promises and Misrepresentation
The companies allegedly claimed they could remove accurate negative information from credit reports. This is not legally possible and misleads consumers.
3. CFPB’s Crackdown on Industry Abuses
This lawsuit sends a strong message. Credit repair services must follow the law, and deceptive practices will face serious consequences.
4. Consumer Redress and Industry Reform
Bankruptcy does not erase legal responsibility. The CFPB is seeking remedies that may include consumer refunds and long-term reforms to protect people from similar misconduct in the future.
What Does Bankruptcy Mean for Consumers?
For clients of Lexington Law or CreditRepair.com, the bankruptcy filing may bring both immediate disruptions and long-term consequences.
- Possible interruptions or cancellations of service
- Lost access to account information or documents
- Difficulty obtaining refunds for services not rendered
- Uncertainty about how to continue credit repair efforts
If you were a client and believe you were misled or overcharged, you may have legal options.
How to Protect Yourself from Unethical Credit Repair Companies
The PGX and Lexington Law case reminds all consumers to be careful when choosing credit repair services. Here are some practical steps to protect yourself.
✔ Do Your Research
Check reviews, Better Business Bureau (BBB) ratings, and CFPB complaints before signing up for any service.
✔ Understand Your Rights
You have the legal right to dispute credit report errors on your own. You do not need to pay for this service.
✔ Be Wary of Upfront Fees
Legitimate credit repair companies cannot charge you before they perform the promised services.
✔ Avoid “Guaranteed” Results
No one can legally remove accurate negative information or promise a specific increase in your credit score.
✔ Get Everything in Writing
Always request a written contract and review the cancellation and refund policies carefully.
How American Legal Shield Can Help
If you’ve been affected by PGX, Lexington Law, or any other questionable credit repair service, you do have legal options. At American Legal Shield, we can help you:
- Review your experience for potential legal violations
- File complaints with the CFPB or FTC
- Take legal action to recover any fees or damages
- Guide you to trusted, legitimate credit repair resources
- Protect yourself from future scams or predatory services
Contact Us Today
Phone: (888) 508-6205
Email: [email protected]
Final Thoughts
The collapse of PGX and Lexington Law is a clear warning sign about the risks involved in the credit repair industry. While there are legal and effective ways to improve your credit, misleading promises and illegal billing practices should never be part of the process.
Stay informed. Know your rights. And don’t hesitate to take action if you’ve been mistreated. American Legal Shield is here to help you stand up for your rights and hold dishonest companies accountable.
