Freedom Debt Relief earned a high customer service rating with the Better Business Bureau; however, they were sued in 2017 by the Consumer Financial Protection Bureau for charging fees without actually settling debt as promised.
Once you enroll debts into their program, they will stop payments to creditors and deposit it directly into a dedicated account instead. This could cause those accounts to default and lower your credit score significantly.
Customer Service
Freedom Debt Relief is an experienced debt-relief company with multiple customer support options for customers to contact them via phone, email, Client Dashboard access, social media or traditional mail. Furthermore, they have provided an informative FAQs section on their website with answers to many common customer inquiries before needing to speak directly with a specialist.
After signing up, clients will undergo a debt evaluation that provides information about their finances and goals, followed by an in-depth debt-relief plan tailored specifically to their situation and budget. When approved, clients deposit money into a dedicated account that pays off debts being settled; when balance reaches target amount, negotiation of settlement with creditors takes place to reduce what was initially owed; clients are informed when such settlement occurs so they may approve or decline it, with funds then going from their dedicated account directly into creditors’ accounts, effectively paying off what was originally due – and this debt relief service can cover.
Although most Freedom Debt Relief reviews are positive, some individuals have had negative experiences. Some claim the company wasn’t as transparent in regards to fees and services provided; others reported being unable to negotiate an equitable deal with creditors.
People may also worry about how debt-relief programs might impact their credit reports and scores. Because debt relief requires stopping to make payments to accounts such as credit cards, these will become delinquent on your reports and could impact future loans or lines of credit that you apply for in the future. Also, creditors may decide to sell off some or all of your debt to collection agencies; Freedom Debt Relief says they offer coaching on handling these calls but their impact could still be considerable; that’s why it is crucial that research different companies to find one that matches both your needs and budget requirements.
Convenience
Freedom Debt Relief works by asking clients to stop paying creditors directly and instead deposit monthly debt payments into an FDIC-insured bank account, the company reports. Once that money reaches a certain threshold amount, Freedom Debt Relief negotiates on each client’s behalf with each creditor until their debts can be settled for less than what was owed; typically this process takes two to four years according to company estimates; during which clients’ credit scores may take a hit as they miss payments with late fees and interest charges accruing; delinquent accounts remain on credit reports for seven years – something clients must understand prior to starting this journey!
Once a settlement offer has been negotiated, Freedom Debt Relief will notify you and allow you to accept or decline. Afterward, Freedom Debt Relief remits it from your dedicated account directly to creditors so as to pay off debt, says the company. Freedom Debt Relief collects an average 24 percent service fee on total amounts enrolled as debt.
Freedom Debt Relief has earned praise from customers for its customer service, including answering inquiries and explaining its program in depth. Unfortunately, Freedom Debt Relief has faced regulatory and litigation issues recently, including reaching a settlement with the Consumer Financial Protection Bureau who claimed it charged consumers without fulfilling its promises to settle debts on time, misled them about fees charged and failed to deliver services as promised.
National Debt Relief offers comparable services, and has earned an A+ rating with the Better Business Bureau and excellent reviews on TrustPilot and Consumer Affairs. However, NDR does not hold American Fair Credit Council accreditation, making its program costlier than Freedom Debt Relief’s program.
Like Freedom Debt Relief, NDR does not specialize in debt that involves collateral (such as mortgages or car loans) nor can it negotiate private student loans; however it does provide free debt evaluation and low-cost monthly deposits into an account specifically set aside to fund debt settlements quickly – an important feature when looking for fast debt resolution solutions. NDR additionally offers complimentary consultation services – something not always offered with other debt relief companies.
Fees
Freedom Debt Relief typically charges a fee of 15% to 25% of what Freedom Negotiates on Your Behalf for settlement services, typically less than paying in full and can be worth considering if your debt could cost too much otherwise. Debt settlement will have an adverse impact on your credit report but may be preferable over default and subsequent collections or lawsuits which can cost much more.
Once you sign on with Freedom, they’ll create a plan tailored specifically to your debt elimination goals. When you begin depositing money into an exclusive, dedicated account set up by them for you, that they use to negotiate debt settlements on your behalf – although there is a one-time setup fee and monthly maintenance costs involved with managing it, according to Fox.
Freedom Debt Relief will negotiate on your behalf to reach a debt settlement offer with creditors on your behalf, at which point you have the option of accepting it or moving on to the next creditor. During this process, your debt may decrease significantly due to missed interest and late fees as negotiations take place.
Freedom Debt Relief can only settle unsecured debts such as those from credit cards and personal loans. Unfortunately, Freedom Debt Relief does not specialize in handling secured loans such as mortgages or auto loans – and does not work with federal student loans either.
Freedom Debt Relief has encountered several regulatory and litigation issues over time. In 2019, they settled with the Consumer Financial Protection Bureau (CFPB) over advance fees and failure to notify customers about how their funds were being spent; as a result, they were fined $20 million in restitution and civil penalties by the agency. Furthermore, Freedom Debt Relief had to settle a class action lawsuit filed by consumers who claimed Freedom Debt Relief sent unsolicited messages while on the National Do Not Call Registry, violating both Telephone Consumer Protection Act and CAN-SPAM Act statutes – serious violations that should have been fined greatly by both government bodies.
Overall
Freedom Debt Relief reviews indicate that people who choose their service are generally satisfied. Customers credit FDR with providing excellent customer service, clearly explaining the debt settlement process and keeping them updated on progress. People with large amounts of unsecured debt (credit cards, personal loans and medical debt) usually find they save significant sums by working with FDR; one disadvantage however may be their requirement to open an FDIC-insured savings account and deposit money before starting haggling with creditors; this can present some obstacles for some clients.
National Debt Relief has an A+ rating from the Better Business Bureau and boasts superior consumer ratings than FDR (4.8/5.0 on Trustpilot and 4.6/5.0 on Consumer Affairs). Both services provide similar solutions for consumers struggling with significant amounts of unsecured debt.