Key Takeaways
- CFPB secured $25 million settlement against Freedom Debt Relief – the largest debt settlement penalty in history
- Freedom charged fees without settling debts and made customers negotiate for themselves.
- The company violated federal consumer protection laws, including the Consumer Financial Protection Act and the Telemarketing Sales Rule.
- Chicago consumers harmed by Freedom Debt Relief have legal rights under federal and Illinois laws.
- Justice Consumer Law offers free consultation with a no-cost guarantee.
Freedom Debt Relief’s claims of simple debt settlement seemed unrealistic. The Consumer Financial Protection Bureau states that Freedom Debt Relief’s offers were indeed too good to be true.
In a major federal lawsuit, the CFPB alleged that “Freedom charges consumers without settling their debts as promised, makes customers negotiate their own settlements, misleads them about its fees and fails to inform them of their rights to funds they deposited with the company.”
Freedom Debt Relief was sued by the Consumer Financial Protection Bureau for deceptive practices, including charging fees without settling debts and misleading customers about their rights. In 2019, the company agreed to a $25 million settlement. Consumers may still pursue individual claims for damages under federal and Illinois laws.
The Federal Lawsuit Against Freedom Debt Relief
Case: CFPB v. Freedom Debt Relief, LLC, No. 3:17-cv-06484 (N.D. Cal.)
Settlement: July 2019 – $25 million total penalty
Court Documents: CFPB Complaint
How Freedom Debt Relief Deceived Consumers:
- False Negotiating Claims
Freedom marketed its “negotiating power” while knowing major creditors like Chase, Bank of America, and Capital One don’t negotiate with settlement companies. Consumers weren’t told they’d handle negotiations themselves.
- Bait-and-Switch Services
Freedom promised professional negotiators would handle creditors directly. Instead, consumers received basic “coaching” to negotiate their own settlements while paying professional fees.
- Illegal Advance Fees
Freedom charged full fees even when:
- No settlements were reached
- Creditors simply stopped collections without negotiation
- Consumers negotiated it themselves.
- No actual services were provided
- Failed to Disclose Consumer Rights
Freedom didn’t inform consumers that they could withdraw deposited funds anytime without penalty or that they owned the money in settlement accounts.
Consumer Complaints Against Freedom Debt Relief
At Justice Consumer Law, we see clients harmed by Freedom Debt Relief’s deceptive practices:
Common Complaints:
- Charged fees without settling any debts
- Credit scores are damaged by following Freedom’s advice.
- Forced to negotiate with creditors after paying for professional services
- Individuals were not informed about their right to withdraw deposited funds.
- Misleading marketing about success rates and creditor relationships
Red Flags Freedom Debt Relief Used:
- Guaranteed specific debt reduction percentages
- Collected upfront fees before settling debts
- Advised stopping all creditor payments immediately
- Misrepresented their “negotiating power” with major creditors
- Pressured consumers into quick contract signing
What You Can Do If Freedom Debt Relief Hurts You
Legal Claims and When
You may be entitled to compensation if Freedom Debt Relief:
✓ Charged you fees without successfully settling your debts
✓ Made you negotiate with creditors yourself despite paying for professional services
✓ Didn’t tell you that major creditors refuse to work with settlement companies
✓ Damaged your credit by advising you to stop payments
✓ Failed to inform you of your right to withdraw funds
Federal Consumer Protection Laws
Fair Debt Collection Practices Act (FDCPA):
- Up to $1,000 in damages per violation
- Attorney fees paid by the violating company
- Actual damages for financial losses
Illinois Consumer Fraud Act:
- Actual damages plus attorney fees
- Enhanced penalties for targeting vulnerable consumers
Better Alternatives to Freedom Debt Relief
| Alternative | Cost | Credit Impact | Success Rate | Time to Complete |
| Nonprofit Credit Counseling | Free-$50/month | Neutral/Positive | High | 3-5 years |
| Direct Creditor Negotiation | $0 | Varies | Moderate-High | 6-18 months |
| Chapter 7 Bankruptcy | $1,500-3,000 | Negative initially, recovers faster | Very High | 4-6 months |
| Freedom Debt Relief | 15-25% of debt | Very Negative | Low | 2-4 years |
1. Nonprofit Credit Counseling
- Free or low-cost services
- Debt management plans that preserve credit
- Find help: U.S. Trustee Approved Counselors
2. Direct Creditor Negotiation
- Contact creditors’ hardship departments yourself.
- No fees to settlement companies
- Often achieve better results than companies like Freedom Debt Relief
3. Legal Consultation
- Bankruptcy may be less expensive than debt settlement
- Provides immediate legal protection from creditors
Why Justice Consumer Law for Freedom Debt Relief in Chicago?
Exclusive Consumer Protection Focus: We only handle cases against companies like Freedom Debt Relief that violate consumer rights.
No Risk to You: Our no-cost guarantee means you pay nothing unless we recover money from Freedom Debt Relief or other violating companies.
Experience with Debt Relief Cases: We understand the specific tactics companies like Freedom Debt Relief use to deceive consumers.
Maximum Recovery: We fight to recover all damages you’re entitled to under federal and Illinois consumer protection laws.
Take Action Against Freedom Debt Relief
The CFPB’s $25 million settlement proves that Freedom Debt Relief can be held accountable for deceiving consumers. If their deceptive practices harmed you, don’t let them get away with it.
Contact Justice Consumer Law today:
- Free consultation to evaluate your Freedom Debt Relief case
- No attorney fees unless we recover money for you
- Experienced representation against deceptive debt relief companies
Remember: Evidence can disappear, and there are time limits on legal claims against companies like Freedom Debt Relief.
FAQs
Can I still sue Freedom Debt Relief after the CFPB settlement?
Yes. Government settlements don’t prevent individual consumer lawsuits. The CFPB case actually helps prove Freedom’s pattern of illegal conduct.
What if I signed Freedom Debt Relief’s contract with arbitration?
Many arbitration clauses in debt relief contracts violate federal consumer protection laws and may be unenforceable.
How long do I have to take legal action against Freedom Debt Relief?
Time limits vary – FDCPA (1 year), Illinois Consumer Fraud (3 years). Contact an attorney immediately to protect your rights.
What evidence do I need for a Freedom Debt Relief case?
Your contract with Freedom, payment records, all communications, credit reports showing damage, and documentation of financial harm.
How does Justice Consumer Law’s no-cost guarantee work?
You pay no attorney fees unless we win your case. When we win, federal law requires Freedom Debt Relief to pay our legal fees.