Lexington Law Prevails Again Against Misguided Attack from Debt Collectors

SALT LAKE CITY, Dec. 9, 2021 /PRNewswire/ -- Recently, a federal jury in Kansas rejected a fraud lawsuit brought by Ad Astra Recovery Services, a debt collector and credit furnisher, against Lexington Law, Progrexion, and several attorneys and credit repair professionals affiliated with Lexington and Progrexion.  

Ad Astra's case centered on letters that Lexington prepared and submitted on its clients' behalf to credit reporting agencies and furnishers (like Ad Astra) regarding potential errors and other reporting issues on the consumer's credit report. Ad Astra, the debt collection arm of a conglomerate that offers short-term, high-interest loans, argued that Lexington had committed "fraud" because these letters were signed with the consumer's electronic signature and were not specifically marked as coming from Lexington. Progrexion was included in the lawsuit because it is a long-running provider of synergistic services for the benefit of Lexington's clients including intellectual property and client interfaces.   

This is now the second federal court to reject cynical and unfounded allegations against Lexington, the leading provider of credit repair services in the United States. Last year, a federal court in Texas rejected the very same arguments from two debt collectors, CBE Group and RGS Financial. That decision was upheld on appeal by the Fifth Circuit Court of Appeals earlier this year.   

"This victory is a significant win for consumers and a huge setback for the debt collection industry's ongoing campaign to cut off consumer access to affordable credit repair services offered by experienced legal professionals and other consumer advocates. Yet again a federal court has rejected a debt collector's unfounded accusations against Lexington and affirmed that Lexington's business model is appropriate and fully compliant with all relevant laws. Consumers have a right to a credit report that is accurate, fair, and substantiated. This victory means that Lexington will continue to be able to provide high quality advocacy and advice at extremely affordable rates ensuring that millions of consumers are able to get the help they need," said Lexington Law's Directing Attorney, John C. Heath. 

From the beginning, Ad Astra's objective was clear: to stifle Lexington's convenient and affordable services, which have enabled many more Americans to challenge errors and other issues on their credit reports, and thereby avoid its "burden" of demonstrating its tradelines are fair, accurate, and substantiated.   

Federal law requires that furnishers like Ad Astra respond to non-frivolous disputes from consumers by reinvestigating the tradeline to ensure that it is correct and substantiated.  However, as Ad Astra repeatedly emphasized in the litigation, the law does not extend this requirement to dispute correspondence submitted, or prepared on behalf of the consumer, by a suspected credit repair organization. Unscrupulous furnishers use this loophole as a justification for ignoring, without consideration or explanation, correspondence sent on behalf of a consumer. In addition to the Ad Astra and CBE cases, lobbyists for the debt collection industry are currently pushing bills in different states that would require credit repair organizations and other third parties to "mark" correspondence that they prepare on behalf of consumers—presumably to allow furnishers to penalize more consumers for turning to an advocate for help.  

The case is Ad Astra Recovery Serv., Inc. v. Heath et al., No. 6:18-cv-01145, D. Kan.   

SOURCE Lexington Law