What the CFPB Alleged
In 2019 the Consumer Financial Protection Bureau settled a lawsuit against Freedom Debt Relief, then the largest debt-settlement company in the country. The core allegations were that Freedom charged customers fees without settling their debts as promised; that it charged fees even where the customer, not Freedom, had negotiated the settlement directly with the creditor; and that it misled customers about its fees and about its ability to negotiate with all of a customer’s creditors.
Freedom did not admit wrongdoing as part of the settlement, which is standard in this kind of resolution. The point of the case for a reader today is not the company’s guilt or innocence but the practices the CFPB flagged, because those practices are ones to watch for at any debt-settlement company.
What Freedom Paid
The settlement required Freedom to pay $20 million in restitution to affected customers plus a $5 million civil penalty — about $25 million in total. The restitution was directed to customers who had paid a fee where there was no settlement, or in connection with a settlement the customer had negotiated themselves.
A restitution fund does not mean every former customer is owed money. It applies to a defined group and a defined period set by the settlement. If you believe you paid fees in those circumstances, the authoritative source is the CFPB’s own case record, not a third-party site inviting you to “claim” anything.
Is Freedom Debt Relief Still Operating?
Yes. The 2019 settlement was a resolved enforcement action, not a shutdown, and Freedom Debt Relief continues to operate. A settled case from several years ago tells you the company was scrutinized and changed practices under a consent order; it does not tell you the experience a customer would have today.
The broader lesson is the one that applies to the whole industry: the fee only becomes payable when a debt is actually settled, and being charged in any other circumstance is exactly what the CFPB objected to. If you are comparing providers, our National Debt Relief review and Accredited Debt Relief review apply the same test.
Before You Act
Thinking About Filing a Claim?
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Freedom Debt Relief Lawsuit: What the CFPB Settlement Actually Found: Frequently Asked Questions
Answers to the most common questions about this case and your legal options.
How much was the Freedom Debt Relief settlement?
$20 million in customer restitution plus a $5 million civil penalty, roughly $25 million total, under the 2019 CFPB settlement.
What did the CFPB accuse Freedom Debt Relief of?
Charging fees without settling debts as promised, charging fees where the customer negotiated the settlement themselves, and misleading customers about fees and about its ability to negotiate with all of their creditors.
Is Freedom Debt Relief still in business?
Yes. The 2019 case was a settled enforcement action, not a closure. The company continues to operate under the terms it agreed to.
Is Freedom Debt Relief the same as National Debt Relief?
No. They are separate companies. The CFPB case was against Freedom Debt Relief and is frequently misattributed to National Debt Relief online.
Legal Disclaimer
This article is general legal information, not legal advice, and does not create an attorney-client relationship. Case status, eligibility criteria, and any amounts described are as reported at the date shown and may change. Consult a licensed attorney in your jurisdiction about your own situation.