Freedom Debt Relief Lawsuit: Facts, History, and FAQs
Freedom Debt Relief LLC is a popular debt settlement company that has helped its clients settle more than $10 billion of debt over the years. However, the company has also faced several lawsuits and regulatory actions in recent years. In this article, we will explain the history and facts of the Freedom Debt Relief lawsuit, outline the allegations made against the company, and answer frequently asked questions related to the lawsuit.
History and Facts of the Freedom Debt Relief Lawsuit
In 2017, the Consumer Financial Protection Bureau (CFPB) and the Attorney General of New York sued Freedom Debt Relief LLC and its co-CEO Andrew Housser for violations of the Telemarketing Sales Rule and the Consumer Financial Protection Act. The lawsuit alleged that Freedom Debt Relief charged illegal upfront fees, misled customers about its services, and failed to deliver on its promises to consumers. The lawsuit also accused Housser of knowing about and approving these illegal practices.
Freedom Debt Relief denied the allegations and claimed that it had helped thousands of customers settle their debts. The company also argued that its services were legal and compliant with industry standards. However, in August 2019, Freedom Debt Relief settled the lawsuit for $20 million. The settlement required the company to cease its illegal practices, pay restitution to affected customers, and provide regular reports to the CFPB on its compliance with the settlement agreement.
In addition to this lawsuit, Freedom Debt Relief has faced several other legal and regulatory challenges in recent years. For example, the company has been the subject of numerous consumer complaints and negative reviews on sites like Trustpilot and the Better Business Bureau. The company has also faced legal actions in states like California, Colorado, and Illinois for violating debt settlement and credit counseling regulations.
Allegations Made Against Freedom Debt Relief
The allegations made against Freedom Debt Relief in the 2017 lawsuit and other legal actions include:
Illegal upfront fees: Freedom Debt Relief allegedly charged customers upfront fees for debt settlement services, which is prohibited under the Telemarketing Sales Rule. The company claimed that these fees were for administrative costs, but the CFPB and other authorities asserted that they were unlawful.
Misleading advertising: Freedom Debt Relief allegedly misled customers about its services and fees through its advertising and marketing campaigns. The company claimed that it could help customers settle their debts for significantly less than what they owed, but failed to disclose the risks and limitations of debt settlement.
Failure to deliver on promises: Freedom Debt Relief allegedly failed to deliver on its promises to customers by not settling their debts or negotiating lower payments. Many customers complained that they paid the company thousands of dollars in fees, but their debts remained largely unchanged.
Coercion of customers: In some cases, Freedom Debt Relief allegedly coerced customers into signing up for its services by making false promises or threatening legal action. The company also allegedly encouraged customers to stop paying their debts, which could result in negative consequences like late fees and damage to their credit scores.
Common FAQs About the Freedom Debt Relief Lawsuit
If you are a current or former customer of Freedom Debt Relief, or if you are considering using the company’s services, you may have several questions about the lawsuit and its implications. Here are some common FAQs about the Freedom Debt Relief lawsuit:
Q: Can I still enroll in Freedom Debt Relief’s debt settlement program?
A: Yes, Freedom Debt Relief is still in business and offering debt settlement services to consumers. However, the company is required to comply with the terms of the settlement agreement, which includes refraining from charging illegal upfront fees and providing accurate information to customers.
Q: Will I receive a refund if I was charged illegal fees by Freedom Debt Relief?
A: If you were charged illegal upfront fees by Freedom Debt Relief, you may be eligible for a refund as part of the $20 million settlement. The settlement requires the company to provide restitution to affected customers, but the process for determining eligibility and distributing refunds is still ongoing.
Q: Is Freedom Debt Relief a scam?
A: While the allegations against Freedom Debt Relief may suggest that the company engaged in illegal or unethical practices, it is not necessarily a scam. Some customers have reported positive experiences with the company and have successfully settled their debts. However, it is important to do your research and fully understand the risks and limitations of debt settlement before enrolling in any program.
Q: How can I file a complaint against Freedom Debt Relief?
A: If you have a complaint about Freedom Debt Relief, you can file a complaint with the Consumer Financial Protection Bureau, the Better Business Bureau, or your state’s Attorney General’s office. You may also consider consulting with a consumer protection attorney for legal advice.
The Freedom Debt Relief lawsuit and other legal actions against the company highlight the importance of doing your due diligence before enrolling in any debt settlement program. While debt settlement can be a viable option for some consumers, it is important to fully understand the risks, costs, and limitations of the process. By researching different debt relief options, working with reputable companies, and seeking legal advice when necessary, you can take control of your finances and achieve your financial goals.
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Freedom Debt Relief, a popular debt settlement company that has helped clients settle over $10 billion of debt, has faced several lawsuits over recent years. In 2017, the Consumer Financial Protection Bureau (CFPB) and the Attorney General of New York accused the company of violating Telemarketing Sales Ruled and the Consumer Financial Protection Act for charging illegal upfront fees, misleading customers, and failing to deliver on services. In 2019, Freedom Debt Relief settled for $20 million. The company has also faced legal and regulatory challenges in California, Colorado, and Illinois for violating debt settlement and credit counseling regulations.