Setup Fee: 15%
Monthly Fee: None
Settlement Fee: None
TASC Members: Yes
BBB Complaints: 139
In Business Since: December 2002
Freedom Debt Relief, which is part of the Freedom Financial Network, charges a standard 15% of your total debt amount. This 15% is spread out over the first 19 months of your program. Their programs range in length from 24 to 36 months. Freedom Debt Relief is one of the larger debt settlement companies in the nation. I was told they have over 50,000 active clients. This can be good or bad depending on the level of personal service you like to receive.
Freedom has received 139 Better Business Bureau complaints over the past 36 months. Of these 139 complaints, only 84 have been closed. This means 55 complaints are still outstanding and have received no resolution. FDR’s website shows them as being an accredited member of TASC, yet when I visit the TASC site and look at their business listing, they are only being shown as a regular member. You should ask about this discrepancy when shopping for their services.
- : 4.3
- : 1.0
- : 4.3
{ 11 comments… read them below or add one }
From: The Daily Journal, San Mateo, CA.
Freedom Debt company sued for misleading customers
By Michelle Durand
Many customers of Freedom Debt Relief actually incurred greater debt through late fees and collection lawsuits because the San Mateo-based financial services company purposely misled consumers to get their business, according to San Mateo County prosecutors.
The Consumer and Environmental Unit of the District Attorney’s Office joined with the California Department of Corporation to sue Freedom Debt Relief, LLC, Freedom Financial network, LLC and company owners Andrew Housser and Brad Stroh. The lawsuit filed Oct. 30 in San Mateo County Superior Court claims the defendants engaged in unlawful business practices, including making false or misleading statements to consumers via the Internet and telephone to induce them to buy debt reduction services. The suit also claims the company violated the state financial code by operating without a business license from the Department of Corporation.
The business, located at 1875 S. Grant St. in San Mateo, advertised having approximately $1 billion in debt under management throughout the United States. The company advertised being able to negotiate a 40 percent to 60 percent reduction in debt to unsecured creditors but, according to prosecutors, instead made some customers’ situations worse.
“Instead of their debts being settled or reduced, many of the defendants’ customers suffered increased debt because of late fees imposed by creditors, referral to collection agencies or collection lawsuits. Some customers ended up in bankruptcy,” according to the suit.
Prosecutors want an injunction ordering the company to follow the law, pay restitution and pay civil penalties between $2,500 and $10,000 for each violation.
The company’s goal, according to its Web site, is to eliminate rather than simply lower debt. The plan for those who qualify, the site explains, is a “debt reduction program” which involves “affordable monthly savings obligations” to get consumers out of debt “in as little as 2 to 3 years.”
The founders have been profiled by numerous news organizations and were finalists for the 2006 Ernst & Young Northern California Entrepreneur of the Year award.
Consumers who believe they have been victimized should file a complaint with the District Attorney’s Consumer and Environmental Unit at (650) 363-4651.
Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.
Im still with Freedom, but it seems like there not doing to much to help my wife and I. There taking money from my banking account and yet my wife had to take out from her 401-plan to pay off one account and it looks like I may need to take money out of a hardship from my work to pay another account. Im not sure what there doing with the money there taking from my bank. and they keep telling me that they are having a hard time negotiating each of my accounts and there only from $1000.00 to $4000.00 and I only have 5 accounts and 2 I had to pay the full amount. My wife was going to retire and now she needs to keep working. Freedom is not what they say they are and they do not do what they say there going to do. Please check other companys out. P.S. I hope this gets on there review list, maybe they only show the good reviews.
Freedom debt relief is a joke they cannot have your debt reduced none of these settlement program works when they finished collecting their hefty fees they do nothing for you. so the 40%-60% they say they can do just do not work. but the amaizing thing is the monthly settlement they show makes me wonder is this for real or is it a gimmick to make people join the program. these people should not allow to do business
Effective the evening of March 9, 2010 not one phone number, email or fax number is being answered by Freedom Debt Relief. In addition their “partner in crime: Global Client Solutions does not appear to have a working “phone number”. You may not be able to retrieve anything, but I suggest you might consider stopping any further withdrawals from your checking account.
I am also with FDR and received my first 1099 from BOA for a credit card debt that was canceled. Get this, my original balance that I submitted was $3,651. The amount canceled by BOA was $3,153. FDR likes to take credit for reducing to a settlement amount of $2,211. So, in actuality they only saved me $1400?! Seriously!?!? Where they heck do they figure this is 41% savings?! Ugh!! I was able to call their 800 Customer Service line tonight and was given the hardest time when I tried to opt out of the program. I signed up in January 2007. They’ve only settled 2 of my 5 credit cards and it’s been 3 full years! She said she could only defer one months payment and then I would have to call back next month to cancel after I’ve “thought about it.” What the heck else is there to think about?! I want out!!!! DO NOT DEAL WITH THIS COMPANY! They are NOT looking out for you.
Beware of Freedom Debt Relief! I was told before I agreed to the program that I would pay in for 40 months (first four years would go to fees to be in the program and 36 months to pay into the program). I have paid my $298 a month for 36 months now. I was ecstatic thinking that I had only four months to go. I have not received a single document from these people in three years showing where my money is going, settlement amounts, or an increase in my number of term months. I called just this week to ask if I was going to receive any paperwork upon completion of the program and to see for sure the last date of withdrawal. I was shocked to hear that I don’t have the four months, but 15 more months to pay into the program! I have paid far more in fees than I had agreed to and now they want me to pay 11 months longer!Why? Because they pocketed all the money that I have paid in rather than pay my creditors! They did say that I could get out of the program, but that I would not receive the amount that my creditor had settled on and that I would be stuck paying the full amount. I can’t afford that as I am a Texas teacher who is facing a layoff. Please, please, don’t fall victim to these debt consolidation companies. Tell everyone you know to stay away from Freedom Debt Relief and Global Solutions.They will lie to you and tell you anything to get you in their program. Once your in, they will suck you dry!!! I hope that someone somewhere will bring these companies to justice and not allow innocent people to suffer at the hands of these money-hungry, lying cheats!
Contact your attorney general. They should be able to help in getting you a full refund of all your payment including “fees”.
I would like to say that I understand how you feel and I’m sorry to hear that you fell victim with such a company. Do know that on October 27th, 2010 the FTC (Federal Trade Commission) has now stepped in and is shutting down ANY Debt Settlement companies who charge any fees prior to settlements. I would not only report them to the Attorney General’s office but make a complaint with the FTC and the BBB. Inform Freedom of this and see how quick they will be to “work with you”. Do know that there ARE legitimate Debt Settlement companies out there who are following the laws accordingly.
Also, here is an article about this company;
Freedom Debt Relief, a debt settlement agency based in San Mateo, Calif., will pay $1.1 million to refund more than 5,000 New York residents who were misled about the amount of money they would save, according to New York Attorney General Eric T. Schneiderman’s office.
An investigation revealed that Freedom Debt lured consumers by making false and misleading claims, including promising to eliminate large portions of debt by negotiating directly with creditors and claiming that it could reduce total debt by 40% to 60%. Consumers were told that they would be “debt-free” within anywhere from one to three years.
But the program, according to the attorney general’s office, left most consumers with as much or more debt than they had before signing up for the service. In lieu of making even the minimum payments to creditors, customers made monthly deposits to a designated account that was purportedly to be used to settle their debt. Freedom Debt deducted its upfront fees from this account before it engaged in a discussion with consumers’ creditors – a practice it continued until the Federal Trade Commission banned it in October 2010.
When consumers were unable to make the strict monthly deposit schedule the program required, they dropped out of the program – having paid most or all of the fees without receiving the promised services. Freedom Debt customers were required to cease paying their creditors directly as a condition of enrolling in the program, so they accrued greater interest and late fees on their debts. Some saw their credit ratings fall, and were subject to wage garnishment and collection lawsuits, according to the investigation.
As part of the settlement, the company also must provide current customers who have paid upfront fees the option to withdraw from the program and receive partial refunds, which could amount to hundreds of thousands of dollars. Current customers also will have the option to remain with Freedom Debt under the condition that they will only pay additional fees upon the settlement of their debts. Freedom Debt also will pay $100,000 in penalties, costs and fees to the state.
The settlement further prohibits the company from misrepresenting any aspects of its debt settlement program, including statements about customer savings unless those statements are substantiated by prior results and incorporate fees.
Freedom Debt must notify consumers of key information about the program and the potential that it could have an adverse impact on a consumer’s credit score or lead to collection lawsuits. In addition, Freedom Debt may collect fees only after settling a consumer’s debts.
“Freedom Debt promised relief and financial stability, but left thousands of its customers even farther in the red,” Schneiderman said. “This office has zero tolerance for those who prey on the vulnerable to make a profit, and will continue to root out the kinds of deceptive practices seen in this case. It is just as important that New Yorkers know how to both recognize and avoid a bad deal, so that they can make sound financial decisions.”
Last week, Washington Attorney General Rob McKenna’s office reached an $800,000 settlement with Freedom Debt Relief after charging that the company violated the state’s Consumer Protection and Debt Adjusting acts.
The state’s Debt Adjusting Act caps the fee that a debt settlement company may charge at 15% of the total enrolled debt. The company allegedly charged consumers more than that in many cases, according to regulators. It also allegedly collected its fees before the time permitted by the statute and did not adequately inform many consumers about how the program actually works.
We we re in the fdr program and we ended up in court twice and
negotiated our own terms and had to money out of retirement
fund.They are never availiable and I got to the point I was
calling them everyday. I told them they shouldn’t keep the money for
fees for the 2 we did ourselves.I told them if they don”t call then I
will,they said go ahead and if yoy get a deal send it to us and we
will finalize it. Anybody out there work with your creditors on your
own or make sure it is a credile one.
Thanks to FDR I had to pay $14,000.00 on a loan that I only owed $9,500.00 on, after having my wages garnished. They claimed the company wouldn’t work with them, the company claimed FDR contacted them too late. FDR didn’t notify me of this until I contacted them to tell them I had a garnishment against me.