The Consumer Financial Protection Bureau filed a complaint against PGX Holdings Inc. and subsidiaries over collecting illegal upfront fees and deceptive marketing practices.
Subsidiaries included in the suit are: Progrexion Marketing Inc., Progrexion Teleservices Inc., eFolks LLC, and CreditRepair.com Inc.; and against John C. Heath, Attorney at Law PLLC, which does business as Lexington Law.
The lawsuit, filed in U.S. district court in Utah, alleges the defendants violated the Telemarketing Sales Rule by requesting and receiving payment of prohibited upfront fees for their credit repair services.
Under the rule, companies can only charge fees for telemarketed credit repair services after providing consumers with documentation reflecting that the promised results have been achieved. That documentation cannot be provided to consumers until more than six months after the results were achieved.
The bureau also alleges that Progrexion and its subsidiaries violated the TSR and the Consumer Financial Protection Act by making deceptive representations in its marketing, or by substantially assisting others in doing so. Progrexion’s marketing affiliates allegedly used deceptive, bait advertising to generate referrals to Lexington Law’s credit repair service, the bureau said in the suit.
Lexington Law and CreditRepair.com are two of the largest credit repair companies in the nation, the bureau said. Heath and Progrexion are headquartered in Salt Lake City and do business throughout the United States.