CFPB filed suit against Freedom Debt Relief, LLC (“Freedom”)
On November 8, 2017, the CFPB filed suit against Freedom Debt Relief, LLC (“Freedom”) and Andrew Housser, the co-founder and co-CEO of Freedom. Freedom works with consumers and negotiates with consumers’ creditors to persuade these Creditors to accept less than what is actually owed. When a debt settles, Freedom charges the consumer between 18 and 25 percent of the amount of debt owed when Freedom’s services were solicited.
According to the CFPB, Freedom misled and deceived consumers by telling them that all creditors would negotiate with Freedom, when in reality, many creditors refuse to negotiate with debt settlement companies. In these situations, Freedom “coached” consumers instead of dealing with creditors directly, yet Freedom did not make clear that consumers may need to handle some negotiations themselves. Freedom also deceived by charging its fee to the consumer, even when a creditor simply stopped collections without a settlement, or when consumers negotiated their own settlements. Finally, Freedom also failed to clearly disclose consumers’ rights to their own account funds after they withdrew from Freedom’s program.
As for Andrew Housser, the CFPB alleges that Housser had the authority and responsibility to approve Freedom’s policies and practices, yet he allowed these illegal practices to continue. Thus, the CFPB alleges that Housser has violated the Dodd-Frank Act and the Telemarketing Sales Rule.
To read the Complaint in full, visit http://files.consumerfinance.gov/f/documents/ cfpb_freedomdebt-relief-llc_complaint_112017.pdf