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.
- Freedom Debt Relief Agrees to Pay Back Consumers After Accusations (walletpop.com)
- State’s consumers win settlement (theolympian.com)
- Freedom Debt Relief’s Winter Energy Savings Tips Keep Money in Consumers’ Wallets (prweb.com)
- Troubled debt-relief company to issue $700,000 in customer refunds (seattlepi.com)