Moreover, the CFPB alleged that Freedom Debt Relief failed to clearly and conspicuously disclose customers’ rights to funds, which they place in an account at an insured financial institution.
Details of the settlement agreement
Under the settlement agreement, Freedom Debt Relief will pay $20 million in restitution to affected consumers and $5 million in civil penalty.
The debt-settlement services provider is prohibited from engaging in deceptive practices and charging fees for non-settlement outcomes.
Freedom Debt Relief must disclose that in some instances, it may request customers to negotiate directly with their creditors. It must also clearly inform customers who withdraws from its service that they are entitled to receive all the funds placed in a Settlement Account except the money it earned.
The settlement agreement is subject approval by the court.
