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Freedom Debt Relief / Lawsuit

1 San Mateo, CA, United States Review updated:
Contact information:
Phone: 650.393.6210

From: The Daily Journal

Debt company sued for misleading customers
By Michelle Durand

Many customers of Freedom Debt Relief actually incurred greater debt through late fees and collection lawsuits because the San Mateo-based financial services company purposely misled consumers to get their business, according to San Mateo County prosecutors.

The Consumer and Environmental Unit of the District Attorney’s Office joined with the California Department of Corporation to sue Freedom Debt Relief, LLC, Freedom Financial network, LLC and company owners Andrew Housser and Brad Stroh. The lawsuit filed Oct. 30 in San Mateo County Superior Court claims the defendants engaged in unlawful business practices, including making false or misleading statements to consumers via the Internet and telephone to induce them to buy debt reduction services. The suit also claims the company violated the state financial code by operating without a business license from the Department of Corporation.

The business, located at 1875 S. Grant St. in San Mateo, advertised having approximately $1 billion in debt under management throughout the United States. The company advertised being able to negotiate a 40 percent to 60 percent reduction in debt to unsecured creditors but, according to prosecutors, instead made some customers’ situations worse.

“Instead of their debts being settled or reduced, many of the defendants’ customers suffered increased debt because of late fees imposed by creditors, referral to collection agencies or collection lawsuits. Some customers ended up in bankruptcy, ” according to the suit.

Prosecutors want an injunction ordering the company to follow the law, pay restitution and pay civil penalties between $2, 500 and $10, 000 for each violation.

The company’s goal, according to its Web site, is to eliminate rather than simply lower debt. The plan for those who qualify, the site explains, is a “debt reduction program” which involves “affordable monthly savings obligations” to get consumers out of debt “in as little as 2 to 3 years.”

The founders have been profiled by numerous news organizations and were finalists for the 2006 Ernst & Young Northern California Entrepreneur of the Year award.

Consumers who believe they have been victimized should file a complaint with the District Attorney’s Consumer and Environmental Unit at [protected].


Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: [protected] ext. 102.

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Comments

  • Wc
      3rd of Feb, 2009
    +1 Votes

    Purported appears to be the operative word here. It will be interesting to follow this suit and its allegations.

    A prorater is someone who holds and controls client funds, and FDR runs a different model based on settling client debts for about half of the principal balance on behalf of the client. They run a solid business and have won many accolades for business practices, employees, and entrepreneurship.

    I know that they settled over $22 million in debts saving over $10 million for their clients just last month. Not every case is perfect, but for someone with real debt problems FDR is a good solution.

  • As
      8th of May, 2009
    0 Votes

    Michelle Durand is a ### you should read the lawsuit report before you open your mouth. Its a governmental suit for not abiding by laws that do not pertain to them.

  • Wi
      28th of May, 2009
    0 Votes

    If all this is true how is this company still operating. I mean if the operation is that bad why didnt they shut them down yet, could it be the people they are helping arent multi billion dollar companies and just regular people like myself? I wonder who is going to finance this D.A.'s future in the spotlight this lawsuit put him in.

  • Ma
      30th of Sep, 2009
    +1 Votes

    Freedom Debt Relief is a scam debt settlement company and should be shut down.

  • Ni
      5th of Mar, 2010
    0 Votes

    Debt USA is a scam. They are Freedom Debt Relief in disguise.

  • He
      1st of Apr, 2010
    0 Votes

    The lawsuit is bulloney. Freedom WON in court in October 2009. All those frivolous accusations have been dropped and Freedom Debt Relief has helped over 75, 000 families get out of debt already. Look at TASC.ORG and you will see FDR listed as a Charter Member...the highest rating a settlement company can receive.

  • Km
      23rd of May, 2010
    0 Votes

    Totally think Freedom Financial is a scam. We paid them $4, 500 to have them settle a debt with the IRS and after we got done paying them the fees, we got this. There is nothing we can do for yoiu the IRS won't settle so you have to pay the debt in full. I think what pissed us off the most was that we paid them $4, 500 dollars that could have gone to the IRS debt and not to them. They screwed us royally

  • De
      3rd of Dec, 2010
    0 Votes

    I had Cancer in 2006 And Bills at the time got behind. And FDR said they would Help me. Thous. of Dollars later Sending Money. Still getting Calls from who I Owed, FDR said write in in a Log We will take care of it. I never got The Help FDR said I would get. I stopped paying and Told them I wanted my Money! I got some back But Nothing like the Amount I had Paid them. Now Im so Behind and get calls Daily about what I owes. Tks FDR Like I didnt Have Probs. With the Cancer. UnHappy in colorado But ALIVE

  • Ti
      8th of Dec, 2010
    +1 Votes

    I was paying them for debt and they showed three collections were paid to the creditor. I had to get out of the program due to hardships and not being able to afford them. The three creditors were never paid and they call for payment and added late fees. Freedom debt is a scam! They will not send my money back or tell me where the money went. I tried to log in to my account and it was gone, luckily I made copies and hope to pursue this when I get back on my feet with an attorney. Anyone with ideas or info I would appreciate the input.

  • Ma
      14th of Dec, 2010
    +1 Votes

    i payed over year of fees and nothing was done on debt

  • Fd
      28th of Dec, 2010
    +1 Votes

    For those who think that this is propaganda from competitors IT'S NOT! I am an average person who was starting to struggle to pay my bills and put food on the table for my family. I reached out to see if there was anything that could be done for my family. Aurthur Ortega from FDR called me with a quote. Telling me that for $244 a month my husband and I will be debt free in 3 years. I told him we were still making payments and had excellent credit. "Oh good, you are an excellent client for us then. Once the credit score goes down we can't do anything for them." 3 months later I call because they have pulled funds but nothing was happening. They then asked if I was still making payments to the credit card companies. I said yes of course. "Oh well if you are making payments we can't help you. You can terminate but we will keep your fees. After talking with my husband we decided to follow their advice and we quit making our payments. It has been a year. They have taken $1780 from us but only $629.00 is in our account to settle with. There is no way we would become debt free in 3 years. They have set us up to fail. They used what ever it took to get us in the program. Our credit went from the 700's to the 500's! I was told by Aurthur our credit would only go down a couple points. So here I am pregnant again with collecters calling me for money. FDR is a Scam and I would like any information on how to get involved in this law suit and if we qualify for it.

  • Mi
      25th of Jan, 2011
    +1 Votes

    Anything that seems too good to be true, probably is!!!

    My husband wants to use a program like this, in fact we just saw it on TV so I told him, "Wait, let me see what they say about FDR on the internet first" and here I am reading all these comments to him. Needless to say, we have decided not to go with FDR. I just realized I live about 10 minutes from their headquarters...I think I'll take a drive down and see what it looks like in person. They are always hiring for telemarketer jobs around here...maybe it's for FDR lol

  • Fr
      6th of Mar, 2011
    +1 Votes

    I contracted over ayear ago for FDR to settle my closed credit accounts over a year ago. On this date March 03 20011 no debt has been settled. I have paid FDR over $5, 000.00 and recieved nothing in return. On March 3 2011, I recieved a phone call from a debt collector informing me that FDR had sent Bank of America a check with my name on it for $2, 000.00 which had bounce. FDR did, at no time inform me that they had negotiated with Bank of America on this deal. They had no right to do this without informing first and asking me if I approved or worst put my name on that check that I had not authorized. I closed the account and recieved a check for $380.00. for my trouble. At no time had a representative of FDR called me or emailed me on what the status was on my acount. As a point of interest...My dear wife and I enjoyed a triple "A" credit rating
    for over 50 years. Not any more...

    whiplash1849@att.net
    Frank C. Lombardo
    3355 SW 159th Avenue
    Ocala, Florida 34481-4947
    (352) 489 1748

  • Sk
      19th of Mar, 2011
    +2 Votes

    I have been in the program with FDR since 2008. The first year I paid nothing but fees. FDR negotiated one credit card. The next one was not taken care of because the negotiator didn't have a clue what was going on and I had to settle in court and make phone calls with the creditor myself. The next two were turned over to a law firm and by that time they would not deal with FDR so I also took those over and am settling with them myself by paying 100%. They have settled on two other credit cards but only at 80% and 84% or something like that. Being in the program has been a joke. When I was having problems with the legal department and nobody negotiating for me I finally contacted somebody in administration and it was then followed up on. I have by far done more leg work on these accounts then FDR has. Like one of the other complaints, the only time I heard anything from FDR was in the beginning when I was making my payments and they were getting their fees. I paid over $6, 000 to them for fees and whatever else they called it. FDR is a scam and when it is all said and done I hope the lawsuit against them is successful.

  • Rg
      22nd of Mar, 2011
    0 Votes

    I filed a complaint with the Better Business Bureau and want to make sure I am included in the lawsuit. My life is ruined. As a retiree, I cannot pay the extra money they want.
    In May, 2007 I began paying FDR a contracted $316 a month for 33 months via direct deduction from my banking account. I am now entering my 47th month and, according to my calculations, I will pay through month 60, paying more than I originally owed. Except for the first creditor, action was taken after I was served a ‘writ of summons’ to court by 3 of my 6 creditors.
    I have paid $316 every month, although sometimes I was instructed to send part of it to the lawyers representing the credit card company and the rest to FDR.
    Amazingly, FDR views my current payment of $225 to the lawyers representing my creditor and $ 91 to FDR as a lowered payment of $91 (thus not honoring my original contract) and $225 as their successful debt reduction.
    I have called and complained to FDR at least four times.
    I think I was duped into choosing FDR.

  • Sh
      30th of Apr, 2011
    0 Votes

    we have been with FDR for almost 2 years they have taken close to $12, 000 from us. and has paid off one dept of $1, 800. we are now being sued by a company so we called FDR and they said they can't help us with this company. even tho we listed them 2 years ago with them. now that they are suing us we are on our own. can we get any money back that we have paid FDR if we Quit them? this is a mess and I'm so sick about this. Shirley

  • Sw
      29th of May, 2011
    +1 Votes

    The Fishman Company . They are nothing but a money grab that prays on people in debt. Bankruptcy is not a bad thing, it is the only way to help you out and give you your life back.I lost over 5, 000.00 to the fishman company. I will never see that money again. Another important point of interest. Any money that you settle for with this company, the forgiveness amount, you will get a 1099 form from the IRS

  • Mr
      25th of Aug, 2011
    0 Votes

    This company is a complete scam. I wish I would of know and I sure would of saved myself a lot of headaches. They pray on innocent people that put their trust to get out of financial debt. They should refund all the money charged all this people for their crap of what they call service. I hope they get what they deserve.

  • Ra
      9th of Apr, 2017
    +1 Votes

    I was lured to use FDR to settle my debts to my creditors in December 20016. They put up a dedicated account that debits my bank for almost $2400.00 a month. Up to this date April, 2016, they have put $6, 000. 00 to their own wallet as settlement fees for just one account that they have negotiated. And guess what, they just paid my creditor $2, 000.00 ! They prioritized their own interest instead of serving the purpose! If only I knew that their original concern was fake, I would never use this company...I am backing out and I need all the help I can get... I need my $6, 000.00 back to pay my other creditors..with that amount, I could have settled one account. Please, if anyone can help me...reach me @ craymon27@sbcglobal.net.

  • Je
      8th of Aug, 2017
    +1 Votes

    @Raymund Gallego I also was duped I had 50k in debt they told me they would save me money. In a year I paid them off 49k in fees. I could of just paid off my creditors with no effect in my credit. Now I have to claim the settlements on my taxes so I'm going to lose money. They knew I was going to be selling my house but still told me that their services were right for me. Worse decision ever going with them. Is there anything we can do?

  • No
      4th of May, 2017
    +1 Votes

    I wasn't having trouble keeping up on my bills - I just wasn't able to pay more than the minimum payment monthly. When I spoke to a guy named Jason, be said I had to let the 3 cards fall delinquent so FDR had "leverage" or the credit card companies wouldn't work on a settlement. I was worried about my credit score because I wanted to buy a house. He assured me my score may go down a few points, but it won't affect me getting a mortgage. I worked in collections - I should have known better. Well, my credit score took a dive, and they only paid off 1 card - because they only work on one debt at a time.
    I was able to set up a repay plan with Discover for pennies on the dollar - and after 6 months of current payments, they show me current on my credit report every month. The other card my mom paid a settlement for me because I wouldn't be able to get a home until my credit was fixed. Took me 2 years, but my score is high - and my report is showing serious delinquency and a charge off because this company is a joke. They also took an extra month of payments out of my checking account, that I had to fight with my bank on. Stay away from these things. Call a local counseling company - because when I did, they said I shouldn't pay to get ahead of my bills and they would have been happy to help me FOR FREE.

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