The Consumer Financial Protection Bureau yesterday announced a $25 million settlement with Freedom Debt Relief, the nation’s largest debt settlement company, after alleging the company was alleged to have charged advance fees and by not settling debts as promised.
A copy of the final judgment can be accessed by clicking here.
Freedom Debt Relief will pay $20 million in restitution to individuals who were affected by the company’s claims, and a $5 million civil penalty.
The CFPB sued Freedom Debt Relief last year, alleging the company violated the Telemarketing Sales Rule by charging advance fees and for allegedly violating the Consumer Financial Protection Act of 2010 by “charging consumers without settling their debts as promised, charging consumers after having them negotiate their own settlements with creditors, and misleading consumers about the company’s fees and its ability to negotiate directly with all of a consumer’s creditors.”
Freedom Debt Relief neither admitted nor denied any wrongdoing under the terms of the settlement.
Under the settlement, Freedom Debt Relief will no longer engage in the practices it was accused of conducting.
“In resolving the case, we have agreed to make some changes to our disclosures and policies to enhance our program, many of which were implemented when the case was first filed,” the company said in a statement. “As the leader in debt settlement, we continue to work hard every day to deliver outstanding service and the best possible outcomes to consumers who turn to us for help.”
Freedom is one of the largest employers in Arizona, with 2,125 employees.
