While customers have mostly good things to say, it’s faced a few alarming lawsuits in the past.
Freedom Debt Relief details
- Services offered: Debt settlement with direct negotiation.
- Free consultation: Get a free quote or by phone in minutes.
- Costs: Monthly payment based on enrolled debt, no upfront fees.
- Types of debt accepted: Unsecured debt, including credit card debt, personal loans and medical bills.
- Minimum debt considered: $15,000 in unsecured debt (average debt is $24,000).
- Typical turnaround: 24 to 48 business days , but it can take longer.
- Accreditations: American Fair Credit Council; platinum International Association of Professional Debt Arbitrators member.
- Ratings: A- BBB rating, 9.0 Trustpilot rating.
- Service limitations: Not available in Colorado, Connecticut, Hawaii, Illinois, Kansas, Maine, North Dakota, New Hampshire, New Jersey, Ohio, Oregon, Rhode Island, South Carolina, Vermont, Washington, West Virginia or Wyoming.
- Free resources or tools: Estimated savings calculator, options beyond debt settlement, customer dashboard.
- Customer service: Phone, email.
How much does it cost?
Customers make monthly payments into an account to save up for the cost of settlement and fees. Freedom Debt Relief doesn’t ask for payment up front.
You’ll pay a monthly deposit over the course of the program that depends on how much you can afford and your total debt. A typical program runs between two and four years.
How much could I save with Freedom Debt Relief?
Customers typically save between 15% and 35% of their enrolled debt after paying fees. But how much you’ll save depends on your unique financial situation and where you live, among other factors.
Let’s take a look at an example. Freedom Debt Relief’s calculator estimates that a California resident making minimum payments on $60,000 of credit card debt at an interest rate of 16.99% could save around $166,920 with debt relief. However, to complete the program they’d have to make monthly deposits of around $926 into the program over four years. This might not be a feasible monthly payment for an individual already struggling to make ends meet.
What are the benefits and drawbacks of Freedom Debt Relief?
- It’s easy to track your progress. Check on your progress through your online dashboard.
- Helpful customer service. Customers praise the customer service team for their helpful answers to questions about the debt relief process.
- It helped set industry standards. Freedom Debt Relief is a founding member of the American Fair Credit Council, which standardizes industry practices. It also had a hand in establishing the Federal Trade Commission’s rules banning abusive debt settlement practices in 2010.
- At risk of getting sued. Former customers complained of getting sued by their creditors since they had to stop paying them in order to save enough in their trust account to begin negotiations.
- Program could take longer than expected. This is a main customer complaint, which means you might need to prepare for the long haul. On average the program takes two to four years.
- Debt settlement not guaranteed. There’s always the risk that your creditors will refuse to allow you to settle your debt.
- Not available in all 50 states. Freedom Debt Relief operates in 33 states, three territories and Washington, DC — where debt settlement services are permitted.
Does Freedom Debt Relief offer services in my state?
Debt settlement services are regulated by state law. If you live in one of the following states, you won’t be able to sign up for Freedom Debt Relief’s services:
- North Dakota
- New Hampshire
- New Jersey
- Rhode Island
- South Carolina
- West Virginia
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What is Freedom Debt Relief?
Freedom Debt Relief is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet. It was founded in 2002 by two Stanford Business School alumni to offer better options for consumers struggling with debt.
Today, it’s an industry heavyweight with a hand in setting the standards for the debt settlement industry.
How does it work?
Like other debt settlement companies, Freedom Debt Relief negotiates with your lenders to reduce how much you owe. It asks you to pay a percentage of the debt you want settled — known as enrolled debt — in exchange for its services.
What do customers say about Freedom Debt Relief?
Customer reviews of Freedom Debt Relief are mostly positive as of March 2019, but they aren’t without a few caveats.
Though it’s not accredited with the Better Business Bureau (BBB), it earns an A+ rating based on factors like transparency and time in business. It scores an average 4.5 out of 5 stars based on over 2,800 customer reviews. It does even better on Trustpilot, where more than 19,000 reviewers result in a collective 9.1 out of 10 rating.
Many customers report a helpful service and relief at no longer having to deal with their creditors. However, a top complaint is that the program took longer than expected — or may not have worked at all.
It’s not an encouraging sign, however, that one of Google’s autocompletes for Freedom Debt Relief is Freedom Debt Relief lies. Online forums speculate that a competitor debt relief company ran a smear campaign against Freedom Debt Relief, but that claim is difficult to verify.
Is it safe to use Freedom Debt Relief?
Generally, yes — by debt settlement standards. You can opt out of having your personal financial information shared with affiliates. Freedom Debt Relief is a founding member of the American Fair Credit Council, a trade association that sets industry standards that govern business transparency practices.
Freedom Debt Relief lawsuits
Freedom Debt Relief has made some unsettling headlines over the past decade. In 2009, it settled a suit brought on by a California district attorney accusing the company of failing to contact its customers’ creditors despite charging them to do so.
Many trusting customers stopped making repayments on their debt after signing on with Freedom Debt Relief, only to find their accounts sent to collection agencies. Some were even being sued by their creditors.
The company made headlines again in November 2017, when the Consumer Financial Protection Bureau filed a suit accusing Freedom of “coaching” consumers instead of dealing with the creditors directly. In some cases, the company still charged its fee when consumers had to negotiate themselves or even when a creditor simply stopped collections without a settlement. And lastly, Freedom did not clearly tell their consumers that they had the right to their own account funds after they withdrew from Freedom’s program.
These are all red flags of a potential scam, so stay up to date on your state’s laws and investigate anything that sounds off to you. Read your contract carefully to make sure you’re aware of all disclosures.
How do I get started?
You can sign up for a risk-free debt relief consultation to see if the service is right for you online, by emailing firstname.lastname@example.org or by calling 800-910-0065.
Here’s how to get started online:
- Go to the Freedom Debt Relief website and click Find debt relief options.
- Choose your unsecured debt amount and click Continue.
- Select whether you’re behind on your payments.
- Select what state you live in.
- Enter your contact information and click Click to see your results.
A Freedom Debt Relief consultant will get in touch to discuss your situation and what options you have.
I’ve signed up. What happens next?
A Certified Debt Consultant will help you design a payment program that’s affordable but also allows you to settle your debt as soon as possible. Here’s what you can typically expect to happen:
- Save up for your settlement with monthly deposits. To cover the cost of the settlement and Freedom Debt Relief’s fees, your deposits go into an FDIC-insured account that you can easily monitor online. At this point, some people stop making payments to their creditors.
- Freedom Debt Relief negotiates with your creditors. Once you have enough funds in your account, Freedom Debt Relief contacts your creditors to discuss a settlement arrangement. This process is delicate, tricky and can take longer than expected. It’s not uncommon for it to take several attempts before your debt is settled.
- Pay your debt settlement. Freedom Debt Relief contacts you each time they reach an agreement with a creditor, asking you to authorize them to pay the settlement through your account.
- Start rebuilding your credit. Debt settlement can cause your credit score to tank temporarily, though your score starts to rebuild after settlements are made.
3 tips to make debt settlement a smart financial move
Follow these pointers to make the most of Freedom Debt Relief while you’re in the program:
- Stick to a budget. A budget not only ensures that you complete the program on time, but it also helps you develop healthier spending habits.
- Don’t take on additional debt. If you’re in a debt settlement program, it’s likely your only options are subprime loans, which are particularly difficult to repay. Settlement isn’t much use if you get sucked into another vicious debt cycle.
- Make all of your monthly deposits. The longer it takes for you to make your deposits, the more your debt balloons, thanks to interest. This is especially important if you stop making repayments to your creditors.
Freedom Debt Relief could be a last-ditch effort to avoid filing for bankruptcy. Customers have mostly positive things to say about its customer service team, but it’s faced several alarming lawsuits in the past. And many clients have complained that it look longer than expected — if it even worked at all.