Two of the largest credit repair companies in the country are targets of a Consumer Financial Protection Bureau complaint.
PGX Holdings Inc.and subsidiaries Lexington Law Group, Creditrepair.com and others are accused of charging illegal upfront fees and using several lead generators that mislead people into signing up.
According to the complaint, potential clients were in some cases, guaranteed or told they had a high chance of qualifying for loans and housing by using the companies.
Investigators say "representations were material and likely to mislead consumers."
The companies also had clients pay between $79.95 to $129.95 for ongoing monthly credit repair services, according to the CFPB.
But the Federal Telemarketing Sales Rule only allows for payment six months after promised results have been achieved.
The complaint details how investigators say the companies worked. Read about it here.
The company released a statement in response:
"Lexington Law and CreditRepair.com have helped millions of consumers achieve credit reports that are fair, accurate, and substantiated. We take the trust and confidence consumers place in us very seriously, we disagree with the allegations in the complaint, and we will vigorously defend ourselves and the valued services we provide."
Consumers don't need to pay to improve their credit.
Paying balances on time, disputing unknown debts on your credit report, and using less credit will raise your score for free.
You can get a free copy of all three credit reports every 12 months at annualcreditreport.com .