RSSThe Consumer Financial Protection Bureau has settled its lawsuit against Freedom Debt Relief over violations of the Telemarketing Sales Rule and the Consumer Financial Protection Act of 2010.
The company agreed to pay $20 million in restitution to affected consumers and a $5 million civil money penalty in a lawsuit originally brought in 2017. Claims against the company’s CEO Andrew Housser, named in the suit, were also settled.
The San Mateo, Calif.-based Freedom Debt Relief allegedly charged illegal advance fees and failed to inform consumers of their rights to funds they deposited with the company.
The CFPB also alleged that Freedom Debt Relief violated the CFPA 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.
The 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.
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.
