From the Web: CFPB Settles with Debt-Settlement Services Provider
Under the terms of the settlement, Freedom Debt Relief, LLC agreed to pay $25 million in combined restitution and penalty.
7/9/2019 8:00 AM
The Consumer Financial Protection Bureau (Bureau) today settled its lawsuit against Freedom Debt Relief, LLC, the nation’s largest debt-settlement services provider. The company agreed to pay $20 million in restitution to affected consumers and a $5 million civil money penalty, according to the CFPB.
The Bureau’s lawsuit alleged that Freedom Debt Relief violated the Telemarketing Sales Rule by charging advance fees and failing to inform consumers of their rights to funds they deposited with the company. The Bureau also alleged that Freedom Debt Relief violated 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, a release from the CFPB revealed.
Today’s settlement enjoins Freedom Debt Relief from engaging in this conduct in the future. The company has also agreed to a consent order with the Federal Deposit Insurance Corp (FDIC). The Bureau will remit $493,500 of the $5 million civil penalty it assessed in light of the penalty that the company was ordered to pay the FDIC. This settlement is subject to approval by the court.
A copy of the amended complaint is available at: https://files.consumerfinance.gov/f/documents/cfpb_freedom-debt-relief_first-amended-complaint_2019-07.pdf
A copy of the stipulated final judgment and order is available at: https://files.consumerfinance.gov/f/documents/cfpb_freedom-debt-relief_stipulated-final-judgment-order_2019-07.pdf
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