Lexington Law is facing a class action lawsuit over what is described as a deceptive advertisement from the law firm.
Currently, the credit repair firm known as Lexington Law is one of the largest companies in the United States that offer credit repair services and now the company has been accused of making false advertisement by a class action lawsuit.
This case was initiated in May 2022 in the U.S. District Court of the Central District of California by one Jennifer Giuliano who was a customer of Lexington Law. The complaint outlines that Lexington Law operates “unfair, unlawful, and fraudulent business practices” due to false and misleading information that the firm uses in its advertisement.
Namely, it identifies the fact that the lawsuit relates to Lexington Law’s assertions that it can assist consumers in increasing their credit scores by ‘‘disputing inaccurate credit information’’ on credit reports and having such information deleted. However, the lawsuit further accuses Lexington Law of not proffering these services as advertised on their website.
FTC Files Suit Against Credit Repair Organizations for Deceptive Advertising
Among the examples of false advertising listed in the complaint are the following: The Complaint lists several specific instances in which Lexington Law has engaged in false advertising through the above media. This includes claims that Lexington Law will:
- Therefore, it is recommended to follow the rule of “delete all unsuitable objects” in credit reports.
- Tell me how this one will benefit you: “Challenge any questionable items” shaving off your score.
- How to get ahead: Dispute those credit listings that are wrong.
- As the rule of deletion of records, they suggested that records should be deleted that are inaccurate, unverifiable, in error, or obsolete.
As per the lawsuit, Lexington Law does not offer these generalized credit repair services to consumers – which are mentioned on its website. It says that Lexington Law does not perform any professional services but only sends form dispute letters to credit bureaus in which people dispute all the unfavorable entries with the hope that some will be deleted.
This practice, which is commonly referred to as credit spamming, is claimed to do very little for credit reporting, checking, confirmation, or even rectification of any errors that may be present in credit reports. Therefore, the lawsuit alleges that Lexington Law has articulated its promotional messages in ways that significantly overstate its capacity for the removal of unfavorable entries and enhancement of consumers’ credit ratings.
Seeking Damages and Restitution
The lawsuit brought by the class action complaint is seeking various relief measures, which include monetary relief whereby the customers of Lexington Law Firm are compensated, restitution, and preliminary injunctive relief whereby the company is barred from using its current misrepresenting advertising claims.
The proposed class is all Lexington Law customers across the country who signed up after 2018 – which, since Lexington Law is a large company with a large marketing reach, could easily be millions of consumers. If certified, the nationwide class action would be one of the largest in legal history that the credit repair company could face.
Apart from the national class claims, the lawsuit also has specific USC claims under California’s Unfair Competition Law since the Lexington Law operates from California.
Lexington Law Denies Allegations
Closely related, in the wake of a legal lawsuit, Lexington Law issued a statement in which all the allegations of engaging in deceptive practices were strongly refuted. The company further asserts that it holds that the claims in the lawsuit are baseless and emphasizes that Lexington Law has assisted millions of consumers in disputing inaccurate and potentially misleading information in their reports for the last 20 years.
Further, Lexington Law defends itself by saying that all the claims it makes in its advertisements are true based on the service it offers to its consumers which is to challenge all items on credit reports that the consumer disagrees with and get the consumers better scores - however, the firm did not deny that it cannot remove all negative marks as claimed in its advertisements.
Loses If A Lawsuit Is Won: Some Litigants Stand To Lose Big
This class action poses a significant legal risk to Lexington Law due to the chances of suffering a devastating blow in terms of the possible damages and restitution that would be ordered by the court in case the company loses the lawsuit. It has been cited in the lawsuit that, the company offers an initial work fee plus monthly fees of $89.95-$129.95; therefore total from millions of its customers could translate to big bucks.
Not solely monetary damages, if the court prohibits Lexington Law from advertising its service to a limited extent then it could be devastating for its business in the future.
For this reason, both the consumers and Lexington Law stand to lose a lot as the case unfolds, making it a worth-monitoring suit for all individuals interested in the credit repair field. The outcome could fundamentally transform the rules and regulations governing the sale and marketing of such services to consumers by businesses.
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