Heard a commercial last week for Freedom Debt Relief on WTOP.
They said that Freedom Debt Relief offers a “proven” alternative that will save “the most money” and get people out of debt in the “shortest amount of time.” (I have a copy of the script, here. FDR radio 0000031)
I’ve sued a couple debt relief operations, most notably Legal Helpers Debt Resolution. I’ve shied away from going after Freedom Debt Relief.
I’ve left Freedom Debt Relief alone because their contracts are very careful. They don’t promise anything much at all. And while they charge a lot, it’s all right there.
They also are very careful to avoid being covered under Code of Virginia 6.2-2000, which sets the fees that can be charged for operating a debt management plan. (Freedom Debt Relief charges way more than they could if they were covered by that law.) Freedom Debt Relief avoids–or carefully tries to avoid–the Virginia law, because they don’t hold the money used to settle the debts.
But the wording on radio ad doesn’t seem to be that careful. I think their radio ad misrepresents the benefits of their service. And a company that misrepresents the benefits of their service violate the Virginia Consumer Protection Act. That’s Code of Virginia 59.1-200.
Why does the radio misrepresent the benefits of their service? Because for most people in financial difficulty, Chapter 7 bankruptcy saves them the most money and gets them out of debt in the shortest time. I’m a bankruptcy lawyer, of course, and I really believe in how well bankruptcy works. (You can read what some of my clients say, here.)
So, I’m gunning for them. Next time one of my bankruptcy clients comes to me, after paying out a lot of money to Freedom Debt Relief, I’m going after them.
PS We’re suing Freedom Debt Relief in 2015
I’m now suing Freedom Debt Relief on behalf of one of my bankruptcy clients.
It’s set for Fairfax General District Court in July, 2015.
We have two theories. First, that the estimate they gave my client on what it would take to settle his debts was totally impossible. And second, that the radio ad was a lie. They have until the end of June to tell us their side of the story. We’ll see what they say.
PPS Freedom Debt Relief is trying to weasel out of the July trial by asking for arbitration
The Freedom Debt Relief contract specifies that you don’t have a right to trial by jury in your hometown. You have to agree to arbitration by the American Arbitration Association. But the American Arbitration Association told us they don’t handle Freedom Debt Relief anymore. They didn’t say why.
Now Freedom’s lawyer, facing a July 9 trial date, is asking us to agree to arbitrate somewhere else. And they are using that as an excuse to ignore our subpoena. Here’s what they said
Is your client not interested in McCammon Group or arbitration in general? My client will file a motion to dismiss based on the arbitration clause if necessary but it seems like something we can work out. Let me know.
Based on the request for arbitration, I don’t think discovery is still in play but we will serve objections and responses directly to your office if you prefer. I do think the requests are overly broad for this dispute but am happy to work with you to narrow them.
All this shows that this arbitration business is a way for these big outfits to delay justice for the consumer.
PS May 2016
I’m looking a a website I got to after seeing Freedom Debt Relief ad in Twitter. Besides talking about their “proven experience”–their key claim is that how many debts they have “resolved.” You might think that for a debt settlement company, “resolved” would mean something like, well, settled. Or completely taken care of. What it means to them, as far as I can tell, is they made a new payment agreement. It does NOT mean that the consumer was able to make the payments. Suppose Jane has $35,000 in credit cards. She has a monthly payment of $750. Freedom Debt Relief works out a payment agreement to pay it off at $600, instead of $750. FDR says they have “resolved” $35,000. Even if Jane can’t make the $600 payments either. The way Freedom looks it it, they have “resolved” $35,000 in credit cards; if Jane can’t make the payment, that’s on Jane, not on them.
(In case that website comes down at some point, I printed it out. It took three pages. 5-8-2016 11-48-07 AM Freedom Debt Relief 1 5-8-2016 11-49-51 AM Freedom Debt Relief 25-8-2016 11-50-25 AM Freedom Debt Relief 3)
I invite Freedom Debt relief to tell the world how many people have signed up for their program; and of those how many have actually gotten out of debt.