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A group of related companies that operated prominent credit repair brands including Lexington Law and have agreed to pay $2.7 billion to settle allegations that their telemarketing affiliates employed fake real estate, mortgage and rent-to-own advertisements to drum up business from consumers who were “hot swapped” to them and charged billions in illegal upfront fees.

The Salt Lake City-based companies — which federal regulators say generated $388 million in revenue last year — are now insolvent, having filed for Chapter 11 bankruptcy protection in June after a federal court ruled that they violated rules prohibiting telemarketers who provide credit repair services from collecting fees in advance.

The Consumer Financial Protection Bureau (CFPB) says that if the settlement is approved, it will consider tapping the bureau’s victims relief fund to provide redress to more than 4 million consumers who were allegedly swept up in the scheme over more than a decade.

Rohit Chopra

“Americans across the country looking to improve their credit scores have turned to companies like and Lexington Law,” CFPB Director Rohit Chopra said in a statement. “This scam is another sign that we must do more to fix the credit reporting and scoring system in our country.”

In agreeing to the settlement, PGX Holdings Inc. — which does business as Progrexion and whose consumer brands include its partner, Lexington Law and subsidiaries and — neither admitted or denied allegations laid out by the CFPB in an Aug. 17, 2022, amended complaint.

The settlement also imposes a $45.8 million civil money penalty against Progrexion and an $18.4 million civil money penalty against Lexington Law.

In filing for Chapter 11 bankruptcy protection in June, Progrexion said that it was ceasing “all non-service-related communications with consumers,” following a March court ruling that credit repair companies that drum up business through telemarketing must wait six months after delivering services to bill clients.

“Progrexion fully intends to emerge as a stronger and even more determined organization,” the company said in a statement, and “continue serving as the equalizer for consumers that rightfully believe that the system is stacked against them as they desperately look for ways to participate in the credit markets on fair and equal terms.”

Lexington Law, which is the “doing business as” name of a Salt Lake City-based law firm — John C. Heath, Attorney at Law PC — issued a similar announcement in June after the U.S. District Court for Utah agreed with the CFPB’s interpretation of the Telemarketing Sales Rule. The rule is one of many drafted since 1995 by the Federal Trade Commission as part of its implementation of the Telemarketing and Consumer Fraud and Abuse Prevention Act.

“This announcement follows a years-long legal battle with the (CFPB) over the interpretation of (an FTC) rule covering the timing of billing for credit repair services engaged by inbound phone calls,” Lexington Law said at the time. “After a vigorous defense of Lexington’s billing practices, the [court] disagreed with a prior court’s interpretation of the rule in question and imposed a six-month billing delay for clients who engage the firm following an inbound phone call.”

The companies said they shut down their call centers and laid off about 900 employees in response to the court’s ruling.

Consumers ‘hot swapped’ from affiliate marketers

In addition to violating the Telemarketing Sales Rule, the CFPB alleged that Progrexion and its subsidiaries violated the Consumer Financial Protection Act of 2010 “by making deceptive representations in its marketing, or by substantially assisting others in doing so, to entice consumers into purchasing credit repair services.”

According to the CFPB’s amended complaint, Progrexion used affiliate marketing programs, including “hot swap partners” to generate leads for Lexington Law and

These hot swap partners used inbound and outbound telemarketing programs that supposedly offered products, such as rent-to-own housing contracts, mortgages, auto loans or personal loans, according to the CFPB.

“In some instances, however, the hot swap partner does not actually offer the products or services it purports to provide, and is instead functioning purely as a source of consumer leads for Progrexion,” CFPB attorneys said in their amended complaint.

While consumers thought they were being qualified for a loan or other service, some hot swap partners would qualify them as leads for Lexington Law or After verifying that consumers had blemishes on their credit and a valid credit or debit card that they could use to pay for credit repair services, hot swap partners would transfer the consumer to a Progrexion call center, the CFPB alleged.

“Hot swap partners have used advertisements that included fake real estate ads, fake rent-to-own housing opportunities, fake relationships with lenders, false credit guarantees, and false and unsubstantiated statements about past consumer outcomes,” the CFPB alleged. “The ads have also included false and unsubstantiated statements about consumers’ likelihood of success in obtaining products and services, such as rent-to-own housing contracts, mortgages, or personal loans.”

The CFPB alleged that one of Progrexion’s “most productive hot swap partners,” The H.O.P.E. Program, “advertised extensively on Craigslist and Facebook, and through a network of paid affiliates, claiming to be able to help consumers with poor credit scores obtain favorable mortgages and rent-to-own housing contracts.”

In one ad, HOPE “guaranteed anyone a 0-to-3.5 percent-down home loan no matter how bad their credit is when we start!” the CFPB said. “In reality, the affiliate did not provide any loans at all. Interested consumers were told that to participate in the (non-existent) loan program, they had to sign up with Lexington Law.”

From at least 2012 through 2017, the CFPB determined that HOPE transferred over 100,000 consumers to Progrexion who signed up for Lexington Law’s credit repair services.

Although Progrexion allegedly worked with many hot swap partners, the CFPB singled out five marketing affiliates for the purposes of seeking relief for deceptive practices in its lawsuit:

  • HOPE, which did business as The HOPE Program, Help Renters, Homes with HOPE and Hope to Own
  • Inc., which did business as One Loan Place and Rocket Daddy
  • Ascent Mortgage Resource Group, which did business as Lead Virtue, First Access Rent-to-Own, First Access Mortgage, United Rent-to-Own, Ascent Rent-to-Own,, American Rent-to-Own, Rent to Own Homes and Hope Resources
  •, which did business as Easy Home Ownership and
  • YHTBA Corp., which did business as, Rent Then Own Homes and

In its complaint, the CFPB said Progrexion or its predecessors have been providing credit repair services to consumers under the trade names “Lexington Law Firm” and “Lexington Law” since approximately 1994 and through since at least 2012.

But the settlement defines “affected consumers” as any consumer who made payments to the defendants through a telemarketing transaction after March 8, 2016, or who was live-transferred by a hot swap partner and made payments to Lexington Law or after July 21, 2011.

If approved, the settlement will require the companies to inform affected consumers of the CFPB’s lawsuit, the settlement and the consumer’s right to cancel their credit repair services.

The settlement would ban the companies from telemarketing credit repair services or selling credit repair services that others marketed through telemarketing for 10 years and also ban them from doing business with certain marketing affiliates.

The bans will remain in effect after the bankruptcy proceedings are complete, the CFPB said.

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Email Matt Carter

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