In a big win for the credit and collection industry, the infamous Lexington Law Group and Progrexion, Inc. have been found guilty of fraud in a federal class action lawsuit filed by two ACA members, the CBE Group and RGS Financial. As ACA previously reported, the member collection agencies alleged that Lexington Law and Progrexion engaged in an ongoing fraudulent scheme of transmitting hundreds of thousands of frivolous dispute correspondence purportedly from consumers but drafted, signed, and sent by the consumer law firm and credit repair company without the specific knowledge and consent of the consumer. This fraudulent credit repair scheme was designed to bombard debt collectors with false credit dispute letters with the intention of deceiving debt collectors and frustrating their efforts to collect legitimate debts.
A jury found that the Lexington Law Group and Progrexion committed fraud in the drafting, signing and mailing of dispute correspondence on behalf of consumers without their knowledge or consent; and fraud by non-disclosure because the jury found that the defendants concealed a material fact with the intent to induce the Plaintiffs to take some action. The jury, however, found the Lexington Law Group and Progrexion not guilty of conspiracy to cause the defendants to suffer damages.
Considering the serious and egregious nature of the findings, the jury awarded both compensatory damages and exemplary damages totaling roughly $2.5 million. This important industry victory was secured by ACA member law firm Malone Frost Martin PLLC. ACA is proud to have supported its members in litigating their claims against these organizations by providing Industry Advancement Funds to help defray the cost of prosecution in The CBE Group, Inc. and RGS Financial, Inc. case.
ACA International will provide an in-depth discussion of this case in the next publication of ACA’s Daily. To read more on the Court’s Decision click here.
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