Freedom Debt Relief Lies: Exposing the Truth Behind the Debt Settlement Company
Debt is a problem that plagues millions of Americans each day. In fact, according to a survey done by the Federal Reserve, the average American household carries $137,063 in debt. Many people are turning to debt settlement companies, such as Freedom Debt Relief, as a way to resolve their financial issues. Unfortunately, there are serious concerns that need to be addressed when it comes to the methods employed by Freedom Debt Relief.
Freedom Debt Relief boasts a significant presence in the debt settlement industry with over $10 billion in debt resolved, which makes them one of the largest companies in the space. However, they have been hit with numerous allegations and accusations, claiming their dealings to be unethical and deceptive.
In this article, we will be investigating Freedom Debt Relief, detailing the lies, accusations, and controversies surrounding this company. We will also discuss the options available to individuals struggling with debt, alternatives to Freedom Debt Relief, and the answer to some common FAQs.
Freedom Debt Relief Lies
Many people who have signed up with Freedom Debt Relief have claimed to have been lied to or misled about the debt settlement process. The company’s website and promotional material state that they “negotiate with creditors to reduce the amount you owe.” But, this is not entirely true.
The truth is, Freedom Debt Relief depends solely on consumers to stop paying their creditors to create a more lucrative situation for them to negotiate later. Essentially, the company requests that consumers stop paying their creditors and divert their monthly payments to an account that will accumulate money to be used towards a settlement offer later.
According to sources such as the Better Business Bureau (BBB), the company’s promises of debt reduction are unrealistic. Many former clients have reported that they were not able to negotiate their debts to their satisfaction, leaving them with large unpaid balances and ruined credit.
Another significant issue with Freedom Debt Relief is the overwhelming number of complaints lodged against the company. Between January and September 2020, the BBB received 559 complaints regarding the company, averaging nearly two a day. BBB’s ratings of Freedom Debt Relief based on these complaints have been rated at an “F”, the lowest possible rating.
Accusations Against Freedom Debt Relief
In 2011, the Consumer Financial Protection Bureau (CFPB) fined Freedom Debt Relief $1 million and ordered it to refund $85 million in fees to customers for deceiving people with their debt settlement services. The CFPB found that Freedom Debt Relief charged customers large upfront fees but failed to settle debts, costing customers millions of dollars in additional interest.
The company was also accused of telling clients to stop paying their creditors, which caused significant harm to their credit scores, leading to garnished wages or lawsuits against them by creditors. Additionally, the $85 million refund was an acknowledgment of the harm done to hundreds of thousands of customers who did not get their anticipated debt relief.
In a separate lawsuit in 2019, a federal judge in California certified a class-action lawsuit against Freedom Debt Relief that challenged the company’s promises and billing practices. The lawsuit alleged that Freedom Debt Relief had victims paying for settlements they believed had already taken place, although it did not, misleading them about its fees, and then overwhelming them with costly overcharges.
Alternatives to Freedom Debt Relief
There are alternative options for those struggling with debt that may be better suited to help. One of the most trusted and established nonprofit credit counseling organizations is the National Foundation for Credit Counseling (NFCC). Their services include credit education programs, debt counseling, budgeting advice, and personalized action plans.
Other options include debt consolidation loans, balance transfer cards, and bankruptcy. While these options may not be perfect for everyone, it’s critical to do your research and choose the right method according to your financial situation.
Frequently Asked Questions about Freedom Debt Relief Lies:
Q. Is Freedom Debt Relief a scam?
A. While Freedom Debt Relief is not a scam, there have been accusations and settlements highlighting deeply unethical behavior by the company. Customers have reported being misled and charged upfront fees, leading to millions of dollars in damages.
Q. How does Freedom Debt Relief work?
A. Freedom Debt Relief claims to reduce an individual’s debt by negotiating with creditors. The company requests that consumers stop paying their creditors and divert their monthly payments to an account that will accumulate money to be used towards a settlement offer later. The company charges fees ranging from 18% to 25% of the debt enrolled.
Q. Is Freedom Debt Relief worth it?
A. It is not worth the risk of significant debt and a ruined credit score. Due to the high failure rate of negotiated balances, the fees, and the company’s poor rating by the BBB and the CFPB, it is best that one explore alternative options.
Q. What are the alternatives to Freedom Debt Relief?
A. Alternative options include nonprofit credit counseling organizations, debt consolidation loans, balance transfer cards, and bankruptcy.
There is no single solution that fits everyone when it comes to resolving financial issues. Freedom Debt Relief may seem like an attractive option to someone struggling with debt, but it is essential to weigh the pros and cons before opting for this program. Rather, explore different alternatives that may be better suited to your needs.
While the company is not a scam, Freedom Debt Relief lies have been exposed, and there are many accusations and complaints of unethical behavior. We advise you to consider all options first and decide after thorough research, and, if required, after consultation with a certified financial planner.
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Freedom Debt Relief, one of the largest debt settlement companies in the US, has been accused of unethical and deceptive dealings. The company, which claims to resolve clients’ debt issues by negotiating with creditors, has been accused of misleading customers and charging them upfront fees. It is also accused of telling clients to stop paying their creditors, ultimately ruining their credit scores. Freedom Debt Relief has been fined $1m and ordered to refund $85m in fees for deceiving customers with debt settlement services and costing them millions of dollars in additional interest. Alternative options include nonprofit credit counseling organizations, debt consolidation loans, and bankruptcy.