In light of the recent actions of the Consumer Financial Bureau (CFPB) accusing Lexington Law and CreditRepair.com of violating federal laws Illinois Credit Services President Jim Droske has prepared the following response.


I want to take this opportunity to explain what these two companies were doing according to the CFPB lawsuit that got them in trouble.

For many years when I used to own a mortgage company, I never referred anyone to a credit repair company because I couldn’t find a compliant one. I know that may sound bad, but that is the exact reason why I created Illinois Credit Services with services based on education and compliance for credit repair. Credit Repair has many laws such as the FCRA (Fair Credit Reporting Act) and CROA (Credit Repair Organizations Act) to protect consumers from fraudulent practices. Unfortunately, too many companies ignore these laws and sell only the “promise” of the results, but it doesn’t work that way.

One of the obstacles for credit repair businesses is that regulators and consumers tend to feel that these two big companies (Lexington Law and CreditRepair.com) represent how all companies in the credit repair industry operate across the nation.   I can assure you…that is simply not correct.  Does McDonald’s and Burger King represent all of the cheeseburgers we eat?   In light of the accusations by the CFPB (Consumer Financial Protection Bureau) in this lawsuit filed on 5/2/2019 against these two companies, I emphatically want you to know that we do NOT engage in or endorse these types of unscrupulous practices.

Here’s the thing about this lawsuit, Lexington Law and CreditRepair.com were both allegedly doing some shady stuff.  Disclosure – I am not an attorney, and none of the accusations have been proven yet, but according to my take after reading the lawsuit, I’m explaining here, in part, what I believe they were allegedly doing.

By the way, Lexington Law and CreditRepair.com are both owned by the same company – Progrexion Marketing.  According to the lawsuit, all profits from both companies go to that “marketing” company which is the parent company.

According to the lawsuit, here’s what Progrexion was doing:

They set up affiliate relationships with companies who marketed to low credit scoring consumers for products like for rent-to-own, or high-risk auto lending. These affiliate websites are ALL OVER the internet. Keep in mind, Progrexion setup the affiliate relationships in a manner that the affiliate was committing the alleged fraud – Lexington Law and CreditRepair.com did not directly do this.

The problem is that no one has ever heard of the parent company Progrexion, but Lexington Law and Creditrepair.com ARE THE SAME as Progrexion. When someone inquires about the product (like a “rent-to-own”) through these affiliate websites, they are told their credit doesn’t qualify but if they work with Lexington Law, they will be able to qualify and can get approved within “x” time period. Then the affiliate would do a live transfer of the consumer to the credit repair companies and would likely sign up on the spot.   Everytime a consumer signed up for credit repair services, the affiliate would be paid a fee.  This is known as their “Hotswap” program to generate leads for Lexington Law.  It is the old bait and switch and when you are promising credit repair results…it is considered a deceptive practice and fraud.

That’s how Lexington Law or CreditRepair.com virtually owned the internet when it came to lead generation for consumers seeking credit repair. The large majority of all bad credit leads from the internet were indirectly created by them and then sent to them.  The perception of these deceptive lead generation practices can quickly extend to regulators and consumers thinking the whole industry utilizes these practices.   That is simply not true.

From a compliance perspective, the “credit repair company” wasn’t making these promises, the affiliate was. When the CFPB did more digging, they found out that many of these affiliate websites did not even offer the services or products they were promoting.   Meaning, some of the affiliate websites offering products such as the “rent-to-own” did not even have a single “rent-to-own” property EVER…the website existed only to generate credit repair leads for these two credit repair companies.  It was all click bait to toy with the emotions of consumers and generate credit repair leads for Lexington Law or CreditRepair.com and ultimately for Progrexion.

An extensive campaign for these types of marketing tactics occurred on Craigslist (I believe) and at one point they were banned because it was found out to be a fraud. At that point, the government did not know or had not been involved, but that’s when the four-year investigation started, and here they are now.

During the investigation, the CFPB got a hold of Progrexion’s sales scripts that Progrexion gave to the affiliates, so it was clear that they (Progrexion) had direct knowledge of what was being said and they took part in creating the deception. If this is found to be accurate, it’s a very high level of fraud.

The theory is that if the affiliate lies, the credit repair companies are not responsible for that lie.   UNTIL…the government found out that Progrexion took part in creating the sales scripts and ultimately, created the deception. Now, Lexington Law and CreditRepair.com are no longer innocent parties.

This scheme is the equivalent of getting paid to refer a client with a script that says:

“Everything will be deleted, and you will get a mortgage in 60 Days if you work with this credit repair company…”

The bigger the promise by the affiliate…the more likely the consumer will sign up for credit repair…and the more money the affiliate makes for all the referrals.

These three companies could be in big trouble. There’s more in the lawsuit too that can be problematic for them as well.

Regarding me, I am a member of a FaceBook group with over 2,000 credit repair company owners, and I have been suggested in the group to be the most compliant example of a credit repair company. Certainly not all, but there are too many companies out there over promising results, charging upfront fees, or charging lump-sum fees (also illegal), selling tradelines, or using illegal contracts.  That is not us…

What Sets Illinois Credit Services apart:

  • Besides being bonded and registered, I am a Life Long Learning Instructor at the College of Dupage since about 2014 and teach 2 (now 3) quarterly classes on credit and credit scoring as needed.
  • I created and wrote a class on credit and credit scoring that was approved by NMLS in Washington, DC and my course has been offered through Falcon Innovations (an NMLS Continuing Education Provider for Mortgage Brokers CE credits) and has been offered in 7 states as one hour of the eight credit hours required annually.
  • I’ve been hired as a Credit Expert Witness for court cases to testify about credit and credit scores and credit-related damages.
  • I could go on and on, but I’m sure you get the idea.  We are fully compliant.
  • From the day I opened Illinois Credit Services in 2009, I worked hard always to be compliant with all regulations, and both consumer’s and affiliate’s expectations. For some companies, it can be a hard balance because they are afraid of losing a sale, so they over promise the results. I have NEVER promised results because legal credit repair is based on laws and processes and legal violations.  There are no crystal balls.

If you have questions about Illinois Credit Services compliance and want to ensure your clients are safe, schedule a free consultation with me!