Arizona residents who had tried to use the services of Freedom Debt Relief for help getting out of debt may be receiving a little more help than anticipated after a $20 million settlement the company agreed to this week with the Consumer Financial Protection Bureau.
California-based Freedom Debt Relief, LLC was accused in a lawsuit of a number of deceptive practices, including violations of the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, and the Consumer Financial Protection Act of 2010. The lawsuit has been working its way through the court system for more than a year.
While Freedom Debt Relief is headquartered in Northern California, according to court documents, “Freedom instructed its customers who had been making payments to their creditors to withhold any further payments and to change their billing addresses with their creditors to Freedom’s Arizona address, 4940 South Wendler Drive, Tempe, AZ 85828.”
In an agreement announced Tuesday, the company will pay $20 million to customers affected by their actions. Freedom Debt Relief also agreed to pay a civil penalty of $5 million. A portion of the civil penalty fees will be provided to the Federal Deposit Insurance Corp (FDIC). The agreement still needs to be signed off on by the court.
In addition to the financial payouts, Freedom Debt Relief, LLC must also now disclose all fees for non-settlements and accurately represent its ability to negotiate on behalf of an individual with each of their creditors.