How to Win a Freedom Debt Relief Lawsuit in 2024
Freedom Debt Relief has paid $25M in settlements for misleading customers and charging unfair fees. If you've been harmed by their practices, you have legal options including filing complaints with the CFPB, FTC, or pursuing a lawsuit with an attorney. You can also avoid debt settlement companies entirely by negotiating directly with creditors.
Settle Your DebtDo you feel misled by Freedom Debt Relief? Did you sign up for their services only to find yourself worse off? You are not alone. Freedom Debt Relief has faced multiple major lawsuits for harmful practices.
What Is Freedom Debt Relief?
Freedom Debt Relief is a debt settlement agency. The company negotiates with creditors to reduce what you owe.
Negotiate Directly with Freedom Debt Relief Creditors
Stop paying high fees to settlement companies. Negotiate directly with your creditors and keep control of your debt resolution. Our partner helps you send settlement offers and manage agreements professionally.
Start Settlement NowHere’s how their program works. New customers list all debts they want to settle. Based on your outstanding debt, you make monthly payments to Freedom Debt Relief. The company creates a bank account for you and saves the balance.
Once they believe there are enough funds, they contact your creditors. Through negotiation, they try to get creditors to accept a reduced payoff. Each time a creditor agrees, you decide whether to make the settlement.
The program continues until every debt is paid off or settled. Freedom Debt Relief estimates most customers stay in the program for two to four years. However, the time varies based on your monthly payments and total debt.
Customer Complaints Against Freedom Debt Relief
As of 2022, Freedom Debt Relief has an A+ Better Business Bureau rating. However, the BBB received 373 complaints in three years. Customer complaints reveal repetitive problems:
- Difficulty terminating agreements and retrieving saved money
- Exorbitant fees for negotiation services
- Unapproved withdrawals from bank accounts
- Misleading statements from customer service representatives
- Little help when creditors file lawsuits
- Wrong estimation of debt repayment time
Trust Pilot shows a 4.5-star rating. Yet negative reviews reveal another pattern of customer confusion:
- Legal action taken that could have been avoided
- Debt increases during the program due to non-settlement
- High service fees that reduce savings
- Settlements not paid on time, voiding agreements
- Lack of actual savings from the program
Debt Settlement Laws Protect You
The Debt Settlement Consumer Protection Act of 2010 sets strict restrictions. Debt settlement companies cannot:
- Charge fees besides enrollment and debt settlement fees
- Make loans or offer credit in exchange for services
- Take confession of judgment or power of attorney
- Receive third-party payment for helping you settle debt
- Purchase debts or engage in debt collection
- Deny you the right to cancel your contract anytime
If you witnessed Freedom Debt Relief violating these protections, you might have a case. Many consumers have successfully sued the company for these violations.
Major Lawsuits Against Freedom Debt Relief
Two major lawsuits have been filed against Freedom Debt Relief since 2017. The New York Attorney General filed one suit. The Consumer Financial Protection Bureau filed the other.
CFPB Lawsuit: Misleading Customers
In 2017, the CFPB filed a lawsuit against Freedom Debt Relief for misleading clients. The CFPB alleged these violations:
Deceiving Customers About Negotiation Abilities
Certain creditors do not allow debt settlements. Freedom Debt Relief knew this but did not inform customers. Clients entered agreements believing their creditors would accept lower payoffs.
Deception About Services Provided
Many customers found the company failed to actively negotiate settlements. Instead, Freedom Debt Relief coached clients on how to negotiate independently. Clients did the legwork while Freedom Debt Relief collected fees.
Unfair Fee Policies
Freedom Debt Relief told customers it would not charge fees unless they settled accounts. In reality, the company charged clients even when taking no action.
Retention of Client Funds
Freedom Debt Relief did not make it easy to retrieve money after leaving. They did not inform clients that the money in accounts was theirs. Many clients terminated relations and lost access to their saved funds.
The CFPB obtained a settlement in 2019. Freedom Debt Relief agreed to pay $20M in damages to affected customers. The company also paid a $5M penalty.
How to File a Lawsuit Against Freedom Debt Relief
If you’re a current or former client, you may file a lawsuit if their practices harmed you. Follow these key steps:
1. Contact Freedom Debt Relief in Writing
State your concerns in writing. Send a certified letter to Freedom Debt Relief. If the company fails to take action within two weeks, take further steps.
2. File Complaints with Government Agencies
The CFPB and Federal Trade Commission handle consumer complaints against debt settlement agencies. File a complaint with both agencies. Also file with your state attorney general’s office and the BBB.
Each agency will investigate and seek resolution. If they see a pattern of complaints, they may start a lawsuit on behalf of customers.
3. Seek Assistance from an Attorney
If complaints fail to result in adequate resolution, seek legal advice. You want an attorney with experience suing debt settlement companies. An attorney will review your case to determine the best course of action.
Provide them with evidence. Include your original debt settlement contract and payments made. Give them copies of complaints to government agencies.
4. Wait for a Resolution
Your attorney will work to obtain compensation for your losses. Cases may take months to resolve. Provide your lawyer with any communication you receive concerning the claim.
How Much Is a Lawsuit Worth?
The value depends on your financial losses and the deceptive acts of Freedom Debt Relief. The company has a history of not being upfront about its program.
Its adverse history makes it vulnerable to future legal action. Your lawyer will assess your case to determine potential recovery.
Time Limits for Filing a Lawsuit
Each state has a statute of limitations. The time cap may vary from two to five years. In some states, it’s even longer.
Waiting too long can result in dismissal if allegations are time-barred. Seek legal advice as quickly as possible. Your attorney can develop case strategy and assemble appropriate evidence.
Negotiate Debt Settlements on Your Own
You can avoid debt settlement companies altogether. Our partner Solo empowers you to negotiate and reach settlements independently.
Negotiating a settlement becomes easy with a structured process. You can send and receive offers from collectors directly. Proper legal language protects your rights when communicating with creditors.
When you reach a settlement agreement, the process manages documentation for you. Your sensitive financial information stays protected from collectors. They cannot over-charge you.
Avoid working with debt settlement companies who don’t always act in your best interest. Take control of your debt resolution process and save money on fees.