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Lexington Law files for motion to dismiss all charges in the complaint filed by the Bureau of Consumer Financial Protection. 

In May 2019, the Bureau of Consumer Financial Protection filed a complaint against Lexington Law credit repair services and

The complaint alleged that Lexington Law engaged in or was complicit in the act of consumer fraud through deceptive marketing practices

Lexington Law responded to the CFPB complaint with a motion to dismiss the lawsuit

Filing a motion to dismiss is standard practice in litigation which forces the Plaintiff to define the charges against Lexington Law further and sometimes results in some dropped charges. 

While, yes, the motion to dismiss was expected…

What wasn’t expected was what was missing from the motion!

Complaint Recap: CFPB Vs. Lexington Law

If you are not familiar with the deceptive marketing allegations against Lexington Law, let me give you a quick recap. 

Or you can read a more extensive Lexington Law Review that goes into much greater detail for each allegation. 

It was alleged by the Consumer Financial Protection Bureau (CFPB) that Lexington Law paid third parties to find customers for them. 

One of these ‘Affiliates’ or ‘Introducers,’ who is referred to as HSP1 in the complaint, advertised for rent to own homes and home loans for people with bad credit.

However, they did not have any homes to rent or any money to loan.

When wannabe homeowners would call HSP1,  they were told that they did not qualify for a loan because of bad credit (without a credit report being run). 

Consumers were told that if they signed up for Lexington Law credit repair services, they would qualify for a (non-existent) home loan with HSB1 in the near future. 

However, they were then told that if they signed up for Lexington Law credit repair services, they would qualify for a (non-existent) home loan with HSB1 in the near future. 

CFPB laid out multiple allegations of employees and executives at Lexington Law possibly actively helping HSB1 further their deceptive marketing practices or at the least actively turning a blind eye. 

The Problem With The CFPB Complaint

Lexington Law has hired an expensive group of lawyers to take on the Consumer Financial Protection Bureau. 

Those lawyers took one look at the complaint against their client and rolled their eyes. 

While I think with an amended complaint some of these charges may stick or induce a settlement, the original complaint is kind of a mess

The motion to dismiss filed by Lexington Law argues that the ‘allegations of deception are too vague to support relief.’

Notably, whatever the truth or falsity of the Complaint, CFPB does not complain in the slightest about how any of the Defendants, particularly Lexington Law and, treated those consumers referred for credit repair help. In any event, as explained below, these fraud claims cannot be sustained against any party here—CFPB did not join (or, sue) HSP1— under either Rule 8 or Rule 9(b). Defendants are not alleged to have made any deceptive statements, only one introducer (HSP1) is the subject of any specific allegations, and all of the allegations of deception are too vague to support relief.

The actual complaint is against multiple companies such as Lexington Law (who is actually a DBA).

Strangely, each of the charges in the complaint is made against the group as a whole, much like a blanket. 

However, the law does not work like that, each company is a separate entity, and each charge will have to be explicitly proven against each entity. 

In fact, one of the companies listed in the complaint is never mentioned in any of the charges or supporting facts for the charges. 

Fortunately, in America, you can’t be convicted just for the company you keep. 

The facts have to prove you were involved and did something wrong, and the CFPB complaint fails to layout each entities roll in the violations. 

Consequently, the Lexington Law legal team has filed a motion for oral arguments for the purposes of the charges being dismissed. 

I’m sure that oral arguments will be scheduled and an amended complaint from the CFPB will all take place by this fall.

What Lexington Law Said By Saying Nothing At All

In regards to the count that Lexington Law charged fees for services that had not been rendered, they simply denied the charge. 

However, in a 42-page motion for dismissal, Lexington Law does not deny the charges of deceptive marketing practices or any of the other consumer-described abuses. 

The entire motion is focused on legal maneuvering and lawyering to force CFPB to clean up this complaint and drop the unsupported charges. 

While I understand that this motion to dismiss is not an admission of the facts, it is not uncommon for these sorts of motions to include a blanket denial of the charges, so people like me don’t overly read into the motion…

Lexington Law seems to argue, ‘So what? Even if this stuff happened, your complaint doesn’t properly allege that Lexington Law did anything LEGALLY wrong.’

And there is a big difference between legally wrong and ethically wrong…