Are Monthly Fees Illegal In Credit Repair?

In a word…it’s illegal. OK, that’s really 2 words. Either way, it’s just not legal for a credit repair company to charge you on a monthly basis for credit repair.

credit repair helping person who was going to pay his credit card

Mention the phrase “Telemarketing Sales Rules” and your credit repair pro and one of two things will happen. 1. They will stare blankly into space without a clue as to what you are talking about or 2. They will freeze. If they give you a blank stare, this is because they don’t know that what they are doing is illegal. If they freeze, they will know that you are onto them. Either way, they are headed into trouble…you may be, too.

The Federal Trade Commission (“FTC”), created the Telemarketing Sales Rules (“TSRs”), back in 1995 to protect consumers from underhanded telemarketers. Congress passed a consumer protection statute and specifically gave the FTC rule making authority to implement that statute. The FTC prohibited some obvious things illegal such as lying to a consumer. However, it specially and specifically addressed credit repair companies and not in a good way. Credit repair organizations and credit repair pros are prohibited from charging or collecting fees from consumers until 6 months after the entire credit repair process has been completed and the credit repair professional gave the consumer the promised results. Moreover, the credit repair pro has to prove that he or she produced those results by obtaining a consumer credit report that shows as much. These rules were not designed to keep credit repair companies or professionals in business.

The TSRs are designed to make sure that credit repair companies which, unfortunately, have a long history of doing the wrong thing, actually produce results for their customers before the customer has to pay. Why do credit repair companies have to wait until 6 months after the promised results have been achieved? The FTC wants to make sure that the derogatory information that has been removed from the credit repair reports are not reinserted.

Since 2019, The CFPB & The FTC Have Been On a Lawsuit Rampage Against Credit Repair Companies & Now…Their Vendors

Since 2019, the CFPB and FTC have filed at least half a dozen lawsuits against credit repair companies and other debt relief companies for violating the TSRs. While they have accused some of these companies of doing fraudulent things in addition to the TSRs, they make no secret of the fact that they are, in fact, enforcing these rules. One such lawsuit has been leveled against Lexington Law, which is one of the largest, if not the largest credit repair company in the United States.

According to the FTC complaint, Lexington has a huge network of referral sources that send it business including rent-to-own places and other financing business. The complaint describes how if someone calls one of these consumer finance places without decent credit, their phone call is “hot swapped” to a Lexington Law representative who tries to sign the consumer up for credit repair services. While that may be one of the driving forces in the complaint, the CFPB has also complained about Lexington Law charging monthly fees for credit repair in violation of the TSRs.

The CFPB Is Now Going After Vendors Of Credit Repair Companies That Don’t Comply With The TSRs

In late September of 2021, the CFPB announced a lawsuit against Credit Repair Cloud and its owner, Mr. Daniel Rosen. Credit Repair Cloud is a software vendor that makes credit repair software. It’s “business in a box” business model allows one to sign up for this software as a service at a modest fee, and begin repairing the credit reports for consumers. It’s excellent software. Very user friendly and full featured. However, now that the CFPB has sued Credit Repair Cloud, it’s very foreseeable that it will subpoena a list of Credit Repair Cloud’s customers and start going after them as well.

The CFPB and FTC want to send a message that the TSRs must be complied with or they will come knocking.

Free & Legitimate Credit Repair Is Now Available

Credit Repair Lawyers of America has a 3 for Free program. We will draft up to 3 dispute letters for you in exchange for your credit report. There is absolutely no charge to the consumer for this as we make our money by suing the credit bureaus and the lenders who screw up your credit report. Our litigation program has no out of pocket charge to you. Call us today at (248) 353-2882 or visit us at Credit Repair Lawyers Of America. You can also email us for more information at



Professional Credit Repair Lawyers Near You In Georgia



3355 Lenox Road #750
Phone: 404-591-6680
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