SAN MATEO, Calif., Nov. 9, 2017 — In response to a formal complaint filed against Freedom Debt Relief by the Consumer Financial Protection Bureau on November 8, the company today issued the following statement to its family of clients, employees, and communities it serves:
Freedom Family –
Yesterday the Consumer Financial Protection Bureau (CFPB) filed a complaint against Freedom Debt Relief (FDR), alleging, among other things, that FDR deceived consumers, first, by not informing them that there are certain “difficult creditors” who will not negotiate and, second, by forcing consumers to negotiate their own settlements with such creditors (so-called “coached settlements”). We firmly believe that the CFPB fundamentally misunderstands how debt settlement works and has acted without proper regard for the consumers it is charged with protecting. We want to set the record straight and share our perspective.
Freedom Debt Relief helps financially challenged consumers achieve financial security by securing for them settlements of their outstanding debts, often at a substantial discount to what they owed. In October 2017, for example, FDR settled $175 million of debts for 43,000 consumers at an average settlement of less than 50 cents on the dollar. That's over $88 million of savings in the month for American families in financial hardship. To date, we've achieved over $7 billion in debt settlements for over 450,000 clients. Throughout our 15-year history, we've stayed centered on our clients and worked hard to earn our reputation as a business that serves our customers effectively, efficiently and ethically. It's no accident that we've become the nation's largest debt settlement provider.
It's surprising, and very unfortunate, that the CFPB chose to act without taking the time to focus either on the facts or the utility and purpose of “coached settlements,” both of which were thoroughly and completely disclosed to consumers at various points in their debt settlement programs. The overarching assertion that we cannot and do not settle client accounts with key creditors is simply not true. In fact, since 2010, Freedom Debt Relief has settled $1.2 billion in debt (nearly 200,000 accounts) for clients who came to us with accounts from the credit card issuers mentioned in the complaint. Sadly, the CFPB paid no attention to the enormous benefits our clients realized from our active assistance in their settlement process.
Perhaps most important, we are not aware of any complaints to the CFPB from our customers over this (or any other) issue – zero complaints. Freedom Debt Relief's business practices are legally compliant, highly ethical and serve the needs of our customers, saving them millions of dollars over what they would otherwise be required to pay.
We'd like to share a few facts that the CFPB hasn't mentioned:
- Along with the CFPB, we share the conviction that consumers' best interests should be protected. In fact, in 2010 we actively participated in drafting the Federal Trade Commission rules that defined the consumer protection regulations that govern our industry. We have also worked with many states and legislatures to define the rules and protect consumers who need it the most, demonstrating our proactive commitment to working with regulators in order to protect consumers over our 15 year existence.
- Our customers love us. Several measures of customer satisfaction reflect this: Our FDR Net Promoter Score (NPS)—a measure of whether customers would recommend a product or service to others—stands at an all-time high. Clients who received our coaching services gave us an NPS score of 76 (on a scale from -100 to +100), among the highest consumer satisfaction scores of any company in any industry. Additionally, when our clients call our service center, customers rate the interactions very highly (96% satisfied).
- We employ a variety of resolution strategies to get the maximum benefit for our clients, always with the client agreeing and approving each and every single settlement and fee we charge. If they don't approve the settlement terms, we don't do the settlement or charge one cent. That is the case for the successful resolutions being questioned by the CFPB as well.
- Our culture of doing what is right for our customers is also reflected in the pride our team takes in the work they do. In its most recent survey, we were ranked #1 in the Phoenix Business Journal's Best Places to work program, we've hired over 900 new employees just this year, and have created a value based culture that we are all tremendously proud of.
- Finally, we've asked to sit down on a number of occasions with the CFPB, to no avail, so we are disappointed that they've rushed to judgment, seemingly putting the interests of a few of the largest creditors ahead of the interests of consumers who need help and support.
We're tremendously proud of the work we do and will continue to work every day to deliver on our commitments to our customers. And we will vigorously contest this complaint.
Thank you for your continued belief in our mission!
Andrew Housser and Brad Stroh
Co-Founders and Co-CEOs, Freedom Debt Relief
Freedom Debt Relief (www.freedomdebtrelief.com)
Freedom Debt Relief is a subsidiary of Freedom Financial Network, LLC (FFN), a family of companies providing innovative solutions that empower people to live healthier financial lives. For people struggling with debt, Freedom Debt Relief offers a custom program to significantly reduce and resolve what they owe more quickly than they could on their own. For more information about the company and its services, see www.freedomdebtrelief.com/what-we-do.
Headquartered in San Mateo, California, Freedom Debt Relief also operates an office in Tempe, Arizona, and employs roughly 2,000 people. The company has been voted one of the best places to work in both the San Francisco Bay area and the Phoenix area for several years.
Contact: Brian Baker or Eric Savitz, [email protected], 415-671-7676
SOURCE Freedom Debt Relief
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