Found in the United States of America, Freedom Debt Relief is a really big and somewhat well-known debt settlement agency. Based in San Francisco currently, it claims to have assisted more than one million customers since 2002 in returning over $15 billion. Still, Freedom Debt Relief has had its fair share of legal problems and customer complaints in the past, the same as other debt settlement companies. By reading this article, the reader will be aware of whether there has ever been a situation wherein someone has sued the Freedom Debt Relief along with the grounds for such litigation.
Law Suits filed against Freedom Debt Relief
Freedom Debt Relief should not be surprised that, as a sizable business with a lot of consumers complaining on social media, Freedom Debt Relief has encountered both customer litigations and the CFPB and FTC. Among the main court cases and legal challenges directed against Freedom Debt Relief are: Among the main lawsuits and legal challenges directed against Freedom Debt Relief are:
- Deceptive Practices Lawsuits from the CFPB and FTC: Both agencies have filed complaints that Freedom deceived customers on the intended services and charges on debts. Freedom resolved the CFPB lawsuit in 2019 and offered $20 million to customers for restitution but is yet to defend for the FTC lawsuit.
- Customer Arbitration Cases and Class Actions: Many customer complaints that have been filed in the legal system include charges of high fees, failure to settle debts, and even unauthorized withdrawal of funds from consumers' savings in a bid to clear outstanding dues from the Freedom Debt Relief. Out of all the cases that are filed against Freedom, the majority end up in arbitration because of the clauses that are in the customer contracts, although some have been taken to class action.
- State Regulatory Actions: Freedom has been subjected to penalties or other legal actions in several states for doing business without appropriate licenses or other violations of debt relief and debt adjusting laws. Some examples from recent years include a $1 million penalty in Washington in 2021, orders to refund the New York customers and to enhance and clarify disclosures in the future in 2022.
Causes of Litigation or Complaints
Analyzing the multiple legal cases and complaints against Freedom Debt Relief and splitting them into lawsuits, government regulations, and customer arbitration, the following patterns and objections arise. These include:
- Excessive and Deceptive Fees: Another frequent respondent’s concern is that Freedom does not explain all the possible fees related to the debt settlement services enough clearly. They are often calculated to the tune of one-quarter of the customer’s enrolled debt, especially in cases of multi-year programs.
- Failure to Settle Debts: Certain consumers indicate that Freedom Debt Relief did not negotiate debt repayments with the credit bureaus involved in debt settlement programs or a portion of them promptly. Delays result in the customers paying fees for longer and some of them have even been sued by creditors or had their savings for the settlements taken or garnished.
- Improper or Deceptive Claims of Success Rates: Though Freedom assures the public that they have high success rates in their negotiations for debt settlements for their customers, detractors say that those rates are exaggerated or pertain to customers who would have finished multi-year programs. Some of the customers fail to complete the financial transaction due to their inability to meet the charges and balance requirements.
Hence, while companies like Freedom of Debt Settlement companies ensure that several consumers can clear their debts for less than the full amount, it also comes with a considerable amount of risks and drawbacks. Litigation and regulatory proceedings against the company show that many have finally agreed that the perceived advantages are overshadowed by the disadvantages. Nonetheless, Freedom continues to protect itself from legal actions while still fully active and taking on new subscribers to its services.
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