Freedom Debt Relief, LLC agreed to pay a total of $25 million to settle a lawsuit filed against it by the Consumer Financial Protection Bureau (CFPB).
The CFPB accused the debt-settlement services provider of violating the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule and the Consumer Financial Protection Act of 2010 (CFPA).
CFPB’s allegations against Freedom Debt Relief
In its complaint, the CFPB alleged that Freedom Debt Relief falsely claimed that it can negotiate customers’ debts to all creditors. It concealed the fact that certain creditors are not willing to negotiate a settlement of consumers’ debts.
Additionally, the CFPB accused the debt-settlement services provider of deceiving customers regarding its fee in cases when it failed to settle their debt. It allegedly charged fees to customers even if it did not help them renegotiate or settle their debts.
Furthermore, the consumer watchdog alleged that Freedom Debt Relief abusively required customers to directly negotiate their debts with their creditors. The company allegedly instructed consumers to deceive or mislead their creditors when asked about their enrollment in a debt-settlement program.
