The FTC Enforcement Action
In 2019, Freedom Debt Relief settled FTC charges for $20 million. The FTC alleged that Freedom Debt Relief: charged fees on debts it had not actually settled; enrolled consumers in the program without disclosing that creditors might sue them or continue collection activity; misrepresented the program's success rate and typical outcomes; and used unfair tactics including charging fees on 'negotiated' debts that creditors ultimately agreed to accept.
The $20 million FTC settlement required Freedom Debt Relief to change its business practices and provided partial refunds to some affected consumers through the FTC's redress program.
Ongoing Consumer Protection Claims
Beyond the FTC action, private class action lawsuits alleged additional consumer harm including: charging fees before completing debt settlement in violation of the Telemarketing Sales Rule; misrepresenting program costs and timelines; damage to consumers' credit scores from the program's advice to stop paying creditors; and enrollment of consumers for whom the program was unsuitable.
The debt settlement industry operates in a legally gray area where vulnerable consumers -- already in financial distress -- seek help that sometimes makes their situation worse. Debt settlement's fundamental model (consumers stop paying creditors and accumulate funds while the company negotiates lump-sum settlements) carries significant risks not always adequately disclosed. See also: Honey Browser Extension Lawsuit.
Who Qualifies
Consumers who enrolled in Freedom Debt Relief's program, paid fees, and experienced harm including: fees charged on unsettled debts; credit damage; lawsuits by creditors; or results materially different from what was represented -- may have consumer protection claims. Check whether your claims fall within prior FTC settlement programs or ongoing class action proceedings.
Status 2026
The FTC settlement has been administered. Some class action claims on related theories continue. Freedom Debt Relief continues to operate under modified practices.
How to Get Legal Help
If you believe you qualify based on the eligibility criteria described above, the next step is a free consultation with an experienced attorney. Most plaintiff-side attorneys handling these cases work on contingency -- meaning you pay nothing unless your case results in a recovery. Bring any relevant documentation including receipts, correspondence, or evidence of the harm you experienced. Related: PayPal Lawsuit.
To stay current on case developments, claim deadlines, and settlement news, bookmark this page and subscribe to LawsuitWatch alerts. Coverage is updated as new court filings, settlement announcements, and eligibility changes are made public.
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Freedom Debt Relief Lawsuit: Consumer Fraud & Fee Deception Claims: Frequently Asked Questions
Answers to the most common questions about this case and your legal options.
Did Freedom Debt Relief settle with the FTC?
Yes. Freedom Debt Relief paid $20 million to settle FTC charges in 2019 over consumer fraud in its debt settlement program.
Can I get money back from Freedom Debt Relief?
FTC refund programs from the 2019 settlement have been administered. Ongoing class action claims may provide additional relief. Check current litigation status.
Is debt settlement legitimate?
Legitimate debt settlement can help some consumers, but the industry has significant fraud risk. Research any company thoroughly before enrolling.
What are the risks of debt settlement programs?
Creditors may sue during the program; credit scores are damaged; fees can be substantial; outcomes are not guaranteed; and tax liability may arise on settled debt amounts.
Are there alternatives to debt settlement?
Nonprofit credit counseling, debt management plans (DMPs), and bankruptcy are alternatives that may be more appropriate depending on your situation. Consult a nonprofit credit counselor for free guidance.