Consumer Protection Act | Debt Settlement Firm Must Pay $800,000

I dislike debt settlement firms. These type of firms represent to the consuming public that it can somehow wash away debt and debt collectors. However, these type of firms rarely inform consumers of the various consequences of using their services to reduce debt; to wit, the firm “Freedom Debt Relief.”

The Washington Attorney General’s Office filed a complaint for violating the Washington Consumer Protection Act against Freedom Debt Relief. Apparently, Freedom Debt Relief would advise consumers to cease paying creditors. Instead, Freedom Debt Relief recommended that the consumer deposit payments into account. Once the money in the account became sufficiently large, Freedom Debt Relief would then use the funds as leverage to negotiate a favorable settlement with the creditors.

However, Freedom Debt Relief allegedly failed to disclose two important facts to its consumers: (1) the consumer’s credit would be adversely affected if they failed to pay their creditors; and (2) the amount of fees Freedom Debt Relief would charge exceeded the fees allowed by law.

In a settlement with the Washington Attorney General’s Office, Freedom Debt Relief agreed to pay consumers approximately $742,613. Freedom Debt Relief also agreed to reimburse the Attorney General’s Office $70,000 for costs and litigation expenses.

This entry was posted in Compensation and Damages, Consumer Protection Act (CPA), Personal Injury, Trial/Litigation and tagged , , , . Bookmark the permalink.

2 Responses to Consumer Protection Act | Debt Settlement Firm Must Pay $800,000

  1. Pingback: Why Filing Bankruptcy Soars Over Debt Settlement | Share On You - iBlog News

  2. Pretty good article. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I’ll be coming back and I hope you post again soon.

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