Consumer Financial Protection Bureau Files Suit Against Credit Repair Company

Is credit repair a scam? Well the The Consumer Financial Protection Bureau (CFPB) has filed lawsuits against dozens of credit repair companies for making false promises and charging high fees. Progrexion (PGX Holdings Inc.), the parent company for Lexington Law, has filed for Chapter 11 protection after a Consumer Financial Protection Bureau enforcement action caused a change in its business model and reduction in revenue, according to a news release from Lexington Law. More specifically, Credit repair firm Progrexion, accused by regulators of deceiving clients, filed bankruptcy after losing a key court ruling and facing $3 billion in claims from the US Consumer Financial Protection Bureau. PGX Holdings Inc. and several related companies will try to sell the business, which shut down nearly all operations in response a federal judge’s ruling this past in March, according to Chapter 11 court papers. The judge sided with the CFPB, which claims the company violated telemarketing rules in part through deceptive practices and by illegal billing procedures.

If you are considering credit repair here are some red flags to watch out for when considering a credit repair company:

• Promises to remove all negative information from your credit report. This is not possible, as the Fair Credit Reporting Act (FCRA) allows certain negative information to remain on your credit report for seven to 10 years.
• Claims to be able to improve your credit score quickly. It takes time and effort to improve your credit score, and there is no magic bullet.
• Requires you to pay upfront fees. Legitimate credit repair companies typically require you to pay a monthly fee.
• Pressures you to sign up immediately. Legitimate credit repair companies will give you time to review their services and ask questions.

Lexington Law, under the following entities, of the largest credit repair companies just filed bankruptcy in Delaware today:

Delaware 6/4/2023 PGX Holdings, Inc. 23-10718 Domenic E. Pacitti $100M-$500M $1B-$10B Request
Delaware 6/4/2023 Credit Repair UK, Inc. 23-10719 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Credit.com, Inc. 23-10720 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Creditrepair.com Holdings, Inc. 23-10721 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Creditrepair.com, Inc. 23-10722 Domenic E. Pacitti $100M-$500M $1B-$10B Request
Delaware 6/4/2023 eFolks Holdings, Inc. 23-10723 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 eFolks, LLC 23-10724 Domenic E. Pacitti $100M-$500M $1B-$10B Request
Delaware 6/4/2023 John C. Heath, Attorney At Law PC 23-10725 Domenic E. Pacitti $1M-$10M $1B-$10B
Delaware 6/4/2023 Progrexion ASG, Inc. 23-10726 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Progrexion Holdings, Inc. 23-10727 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Progrexion IP, Inc. 23-10728 Domenic E. Pacitti $100M-$500M $100M-$500M Request
Delaware 6/4/2023 Progrexion Marketing, Inc. 23-10729 Domenic E. Pacitti $100M-$500M $1B-$10B Request
Delaware 6/4/2023 Progrexion Teleservices, Inc. 23-10730 Domenic E. Pacitti $100M-$500M $1B-$10B