Sarah Edwards | November 22, 2022
Summary: Freedom Debt Relief is generally a good debt settlement company, but it has a history of violating consumer rights. The CFPB and NY Attorney General’s office have recently filed lawsuits against Freedom Debt Relief due to harmful debt settlement practices. You can use SoloSettle to avoid working with traditional debt settlement companies and reach a debt settlement on your own terms.
Do you feel misled by Freedom Debt Relief? Did you sign up for their debt settlement services only to find yourself in a worse position than before? You are not alone. In the last few years, Freedom Debt Relief has been the subject of two major lawsuits alleging that the company did not act in its clients’ best interests.
Freedom Debt Relief is a debt settlement agency that works on behalf of its clients to negotiate an agreement with their creditors to pay off their obligations. When new customers sign up for the program, they list all the debts they want to settle and their account information.
Based on the value of their outstanding debt, Freedom Debt Relief requires customers to make a monthly payment to them. The company creates an individual bank account for each client and saves the balance until the customer has enough money to settle an account.
Once Freedom Debt Relief believes there are enough funds to settle an account, they’ll contact one of the client’s creditors and begin a negotiation process. Through negotiation, they seek to get the creditor to agree to accept a reduced payoff to close the account and stop collection activities.
Each time a creditor agrees to accept a reduced amount, the customer decides whether to make the settlement. If they go forward with the payment, the creditor closes the account and no additional amount is due.
The program continues until every debt included in the client’s portfolio is paid off or settled.
Currently, Freedom Debt Relief does not provide the average discount they are able to obtain from creditors. They estimate that most customers will be in the program for two to four years before they settle their debts. However, the time may vary depending on the client’s ability to make monthly payments and the total value of their debt.
As of 2022, Freedom Debt Relief currently has an A+ Better Business Bureau (BBB) rating, with 373 complaints in the past three years. Despite their positive rating with BBB, customer complaints indicate a history of repetitive problems, including:
Many of the complaints submitted to the BBB are pretty severe and concerning.
A check of Trust Pilot shows that the company has a 4.5-star rating. However, negative reviews on the site also show a pattern of customer confusion and poor customer service, including:
Clearly, not everyone believes that Freedom Debt Relief is as helpful as it tries to be.
The Debt Settlement Consumer Protection Act of 2010 sets restrictions on the actions that debt settlement companies, like Freedom Debt Relief, can take. For example, debt settlement companies cannot:
If you’ve witnessed Freedom Debt Relief violating any of these points, you might have a case against the company, as many other consumers have in the past.
There have been two major lawsuits filed against Freedom Debt Relief since 2017. One suit was from the New York Attorney General’s office. The Consumer Financial Protection Bureau (CFPB) filed the other lawsuit.
In 2017, the CFPB filed a lawsuit against Freedom Debt Relief for misleading clients. The CFPB alleged the following against the company in the suit:
Certain creditors do not allow clients to settle the value of their accounts for less than they owe. The CFPB alleged that Freedom Debt Relief knew this and did not inform their customers, who entered into debt settlement agreements believing that their creditors would accept a lower payoff.
Some customers found that after they signed up for the program, the company failed to actively negotiate a settlement with their creditors. Instead, Freedom Debt Relief coached its clients on how to negotiate a settlement independently.
The client did most of the legwork, while Freedom Debt Relief collected fees for its “services” and held the customers’ money.
The lawsuit filed by the CFPB against Freedom Debt Relief alleged that the company told customers it would not charge any fees unless they settled an account on behalf of their client. In reality, the company charged clients even when they took no action on behalf of their clients.
Freedom Debt Relief did not make it easy for clients to retrieve their money after leaving the program. They did not inform them that the money in their accounts was theirs. Many clients terminated their relations with Freedom Debt Relief and lost access to the money saved during their time in the program.
The CFPB obtained a settlement with Freedom Debt Relief in 2019. The company agreed to pay $20M in damages to affected customers and a $5M penalty.
It’s highly possible that individuals have filed claims against the company that are not on public record.
If you’re a current or prior client of Freedom Debt Relief, you may file a lawsuit against the company if you believe their practices harmed you. Before doing so, it is essential to follow some key steps:
If you’re considering a lawsuit against Freedom Debt Relief, you likely have experienced some severe issues. They may have promised you debt relief that hasn’t happened or refused to refund you the money you have saved during the program.
Whatever your troubles are with the company, state them in writing and send a certified letter to Freedom Debt Relief.
If the company fails to take action within two weeks, or their attempts to resolve the issue are unsatisfactory to you, it’s time to take further steps.
The CFPB and the Federal Trade Commission are in charge of handling consumer complaints against debt settlement agencies. File a complaint against Freedom Debt Relief with both agencies. You should also file a grievance with your state’s attorney general’s office.
You may also seek action against Freedom Debt Relief by filing a complaint with the BBB.
Each agency you file a complaint with will investigate the matter and seek to come to a resolution that you and Freedom Debt Relief agree to. Suppose the CFPB, FTC, or the attorney general sees a pattern of customer complaints concerning similar issues. In that case, they may start a lawsuit against Freedom Debt Relief on the behalf of you and other customers.
If your complaints and contact with government organizations and the BBB fail to result in an adequate resolution, you should seek the advice of an attorney. You’ll want an attorney who has experience suing debt settlement companies and understands how they work.
An attorney will review the facts of your case to determine the best course of action. Make sure to provide them with your evidence, including the original debt settlement contract with Freedom Debt Relief and payments made to the company. You should also give them a copy of your complaints to government agencies and the BBB.
Your attorney will work on your behalf to obtain compensation for your losses from Freedom Debt Relief. It may take some months to resolve your case. In the meantime, provide your lawyer with any communication you receive concerning the claim. In rare cases, a claim may need to go to trial to be resolved.
The value of your lawsuit depends on the extent of your financial losses and the negligent or deceptive acts of Freedom Debt Relief. Freedom Debt Relief has a history of not being upfront about its debt settlement program or how much it can help its customers.
Its adverse history of other lawsuits makes it vulnerable to future legal action, especially if it has not taken steps to correct deficiencies in its debt settlement program.
Your lawyer will assess your case to determine what they may recover for you from Freedom Debt Relief.
Each state has a statute of limitations that caps the time a customer has to sue for deceptive, negligent, or fraudulent acts by a company. The statute of limitations may vary from two to five years. In some states, it’s even longer.
Waiting too long to sue Freedom Debt Relief can result in a dismissal if the allegations are time-barred. It is best to seek the advice of an attorney as quickly as possible so they can develop your case strategy and assemble the appropriate evidence.
SoloSettle’s goal is to empower you to negotiate and reach a debt settlement on your own.
With SoloSettle, negotiating a settlement becomes easy due to our structured process. Use our web-app to send and receive offers from collectors. SoloSettle drafts offers for you and protects you from the potential lies and bullying of debt collectors.
Most importantly, SoloSettle makes sure all of the proper legal language is included to protect your rights when communicating with the creditor or debt collector. When a settlement agreement is reached, SoloSettle manages the settlement agreement documentation for you and protects your sensitive financial information from the collectors, preventing them from over-charging you.
Avoid working with debt settlement companies, who don’t always have your best interest at heart.
Check out this review from a real SoloSettle customer:
“I'm very thankful for SoloSettle.. Having a third party negotiate the settlement was instrumental in resolving this case and saved me from two giant headaches: 1) I didn't have to deal with the plaintiff's lawyer and 2) I didn't have to go to court. I also love that the payment was processed through SoloSettle. I was nervous about sharing my personal financial data with the other side, but SoloSettle protected that for me. I hope I never get sued again, but if I do, I would use SoloSettle again in a heartbeat.
SoloSettle really saved me a ton of time and heartburn and kept me from having to be my own lawyer in court.”
Check out this video to learn more about how to settle a debt:
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
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