Being in debt is a difficult situation faced by many people. Unfortunately, it can be made much worse when debtors are targeted by unscrupulous scammers posing as debt relief specialists steal from the people in debt. Recently the Consumer Financial Protection Bureau (CFPB) settled a lawsuit against Freedom Debt Relief LLC, the country’s largest debt relief company.  Under the terms of the settlement, Freedom Debt Relief will refund 20 million dollars to consumers as well as pay a fine of 5 million dollars.  I will report to you when details of the refunds become clear in regard to how to make a claim if you were affected by the actions of Freedom Debt Relief.

In its lawsuit the CFPB alleged that Freedom Debt Relief charged illegal advance fees and also failed to inform consumers about their rights to funds deposited with the company.  It is illegal for a debt relief company to charge a fee prior to settling your debts.  The CFPB also alleged that Freedom Debt Relief charged consumers without even settling their debts and charged consumers after the consumers themselves settled claims with their creditors.  Freedom Debt Relief was also alleged to have mislead consumers about the fees they charged and about consumers’ rights.

TIPS

There are many debt relief companies that may be able to help people with debt problems, however, credit counseling services may be a better and more economical choice for many people.  While there are legitimate debt relief companies, there also are many scammers who will take your money and provide little, if anything, for your payment.  Again, it is important to remember that it is illegal for a debt relief company to charge you a fee prior to settling your debts.  If you are considering using a debt relief company, you should check with your state’s Attorney General and your state’s consumer protection agency to see if there are any consumer complaints against them.  Finally, for detailed information about alternatives to consider if you are having debt problems, go to the FTC’s website at https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor

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