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Hundreds of cash-strapped Washington consumers who were overcharged by debt-relief company Freedom Debt Relief will receive nearly $740,000, thanks to a settlement reached with the Washington State Attorney General’s Office. The settlement was reached in conjunction with a proposed class action lawsuit settlement against the company.
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About 1,100 Washington consumers who collectively owed $35 million in debt enrolled in Freedom Debt Relief’s program, which purports to work out a deal with credit card providers to minimize their debt. Under its program, consumers stop making payments to their unsecured creditors and allow those accounts to go into default. Debtors then pay into a bank account they control, which is subsequently used to settle their debts. Freedom Debt Relief deducts its fees from the account. When sufficient money has accumulated in a consumer’s account, Freedom Debt Relief attempts to negotiate with creditors to settle the debts for a fraction of the balance.
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The A.G. said the California-based company had broken local consumer protection laws by overcharging customers more than the state’s legal cap of 15 percent, taking fees before the legal time allowed, and failing to adequately inform consumers about how the program works.
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Freedom Debt Relief stopped enrolling Washington residents in March 2009, when a private class action lawsuit was filed against it. The lawsuit, entitled Carlsen et al. v. Freedom Debt Relief, LLC, et al., is still pending a settlement approval hearing set for April 4.
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Under the A.G.’s settlement, Freedom Debt Relief will refund more than 570 customers for all fees paid in connection with debts that weren’t settled or aren’t in active negotiation programs, up to $742,613 or more. The refund program will be handled through the Carlsen v. Freedom Debt Relief class action lawsuit. Once the court in that case gives approval of the proposed class action settlement in April, eligible consumers will be contacted about the refund process, how much money they are eligible to receive, and how to submit a claim.
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Class members of the Freedom Debt Relief class action lawsuit, which also names Freedom Financial Network as a defendant, can read more about their rights under the proposed class action lawsuit settlement in the Settlement Notice. All class members will automatically receive refunds if the proposed settlement is approved. No claim form required.Â
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Updated March 7th, 2010
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53 thoughts onFreedom Debt Relief Settlements Reached
Well, good luck to you all. I just got my check in the mail today and after paying 1,700.00in fees all I got was (drum roll)…… $70.00 dlls. Don’t hold your hopestoo high of getting reimbursed for the full amount. I live in Texas.
From Mo. I to was suckered in with their promises. I live on SS and paid over 31 months over 10,000. 2 cards were settled for 2600. No explanation of where the other 7000 went. Forced me to quit and file bankruptcy. Thanks FDR. Such a scam. People beware.
I’m still waiting for a check….any news?
I got a notice telling me how much they owed me, but I still have not received anything and I need to put in a change of address. Anyone get paid yet?
I have just cancelled my account with FDR about a week ago. In the beginning the company called me once every week for about 6 weeks to see if I had any questions or concerns then they stopped contacting me. I had to contact them on several occasions and was told to fax over any correspondences I received from creditors. Also, when I get calls from creditors to give their phone number and mailing address. I was told they were in negotiations with all my creditors. Then on another phone call to them after I kept getting calls from creditors, I was told they have not started negotiations on any of them because there wasn’t enough money in my account. I informed them there certainly was enough for at least one account and that I was more concerned with them settling with a current credit card rather than an old cell phone bill that was already reported on my credit report. When I got a letter from an attorney informing me they would file a lawsuit against me if I didn’t respond I forwarded that letter to FDR as requested and they said they would respond to the attorney on my behalf and they would take care of it. Now, I have been served by this attorney and found out FDR never contacted them because they didn’t have enough funds in my account to start negotiations! Had I known they weren’t going to contact the attorney within the 30 day period I would have done so myself. I cannot afford to have a lien against my paycheck or my bank account….FDR has messed me over as well and now I am contemplating filing bankruptcy or making payments to collectors, as ALL my debts have been turned over to collections now! Although my credit wasn’t perfect, it was better than it is now because I was making the required minimum payments. I will start another lawsuit against them and eventually they will be completely shut down, if everyone files their own suit against them.
Has anyone heard wend payments will start going out?
WHY ARE THEY STILL ALLOWED TO BE IN BUSINESS? THIS IS WHAT OUR COUNTRY ALLOWS COMPANIES TO DO TO US AND STILL LIVE ON EVEN AFTER IT HAS BEEN DISCOVERED LEGALLY? WOW! ME AND MY HUSBAND WERE RIPPED OFF TOO. WE CALLED THEM WHEN WE SAW THE HARD TIMES AHEAD THINKING WE WERE DOING THE RIGHT THING- BEING PROACTIVE. THEY TOOK OUR GOOD TO EXCELLENT CREDIT AND TRASHED IT. THEY CAUSED MORE STRESS THAN WE WERE ALREADY UNDER. 2 1/2 YRS LATER WE ARE STILL DEALLING WITH TRYING TO GET ATLEAST FAIR CREDIT BACK! UGGGHHHH!!!
Yea. Paid a lot of fees too. Here in Texas. We would shoot them fools. Thanks for ripping off people. And they still advertise in Texas. I will never recommend them to anyone.
There’s really no way of knowing how much we’re getting back since we’re not privy to the amounts that other claimants paid in fees. Since it’s being disbursed pro rata, whoever paid larger fees will receive a larger piece of the pie and so on. It’s being divided amongst approximately 5,000 claimants after attorney and administrative fees have been taken out so there’s not going to be a whole lot left and dividing it out over 5,000 people.
how do we know how much we are getting back