Financial stress, driven especially by loans and debts, is an important factor behind psychological burdens that lead to anxiety, depression, and feelings of helplessness. To deal with such burdens, people often contact financial professionals who can help them settle their debts. Such highly pressurized situations often lead people to scammers.
If you are a U.S. citizen and you are looking to relieve yourself of debt, you might have come across Freedom Debt Relief. Like all the other people seeking relief, a question might have come to your mind, too: Is Freedom Debt Relief a scam or legitimate?
Many debt relief companies make false promises to clients, claiming to free them of their debts overnight. They ask for high upfront fees, which is illegal. Moreover, daily, we come across many cases and stories about debt settlement scams, so it is really difficult to trust anyone.
Every time you are looking for debt relief, make sure to do thorough research about the company you are applying to.
In this blog, we are going to explain the nitty-gritties of whether Freedom Debt Relief is a scam or legitimate, how it works, and how to distinguish between a trustworthy company and a scam.
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What is Freedom Debt Relief?
Freedom Debt Relief is a debt resolution company based in San Mateo, California. It was founded in 2002 with a mission to help American citizens overburdened by their unsecured loans, like personal loans and credit card debts. In 2002, when the company was launched, consumer debts were rising at potentially high rates. At that time, they helped their clients with debt settlements, which later became the industry standard. Since that time, Freedom Debt has solved many settlement cases and has grown as one of the largest debt settlement companies in the U.S.
Since its inception, the company claims to have resolved over $20 billion in consumer debt for more than one million clients across America. Understanding the background of Freedom Debt Relief and the milestones it achieved will help you conclude whether it is a scam or a legitimate company, and whether it is the best fit for your debt settlements or not.
Why People Ask: “Is Freedom Debt Relief a Scam?”
Is Freedom Debt Relief a scam? It is the most frequently asked question by people who are overwhelmed by unsecured loans. This is because, under circumstances of high loan pressure, they are the most vulnerable entities to get scammed. Along with it, scams are very common in sectors dealing with debt relief.
When people contact any debt relief company, they come with the mindset that everything will get settled within days, and they will be relieved. But in reality, it is not the ideal resolution path, and the process can take years. So the concept behind immediate settlement also influences the mindset behind Freedom Debt Relief as a scam.
Moreover, Freedom Debt Relief has faced lawsuits by the Consumer Financial Protection Bureau for mishandling disclosures and fees. Later on, the company settled those allegations, but it was imprinted in the minds of people.
Being legitimate does not always mean that Freedom Debt Relief is the best pick for everyone. Debt settlement has its own risks and outcomes that depend on your financial situation.
All these reasons influence people to ask this question again and again. As they don’t want themselves to carry the extra burden of getting scammed along with the financial pressure of debts.
For the readers, the lesson here is simple: always read policies, practices, and clauses before joining any debt relief program. And if you are unsure, get legal advice to make sure the program fits your needs.
Freedom Debt Relief vs. Scams
While searching for a legitimate debt relief company, you have to stay vigilant and cautious. Just like you, who is searching for the perfect relief company, scammers too are always in search of highly pressured individuals they can scam. So, for your ease, we are presenting you with four red flags you always have to look for while sorting the best company. Moreover, we will also analyze whether those red flags are present in Freedom Debt Relief or not. This will help us conclude the legitimacy of it.
Red Flags to Look for
When you are looking for debt relief companies, don’t trust anyone blindly. Look for the following red flags and then decide whether the company is legitimate or not.
Scammers Contact you First
Scam companies contact you through robocalls, spam emails, or assertive recorded messages. They compel to provide you with debt relief overnight or within a few days. So, if someone is contacting you to push you to be your problem solver, don’t fall for it.
Demand Upfront Fees
The scam companies always ask you to submit fees even before taking the first step toward resolving your debt-related issues. Asking for upfront fees is not just wrong but illegal under FTC rules.
Ask you to End your Connections with Creditors
Fraudulent companies will ask you to stop conversing with your creditors. This can lead to mistrust. Even your creditor can sue you. Moreover, they won’t agree to negotiate with any other settlement company that will come on your behalf to negotiate.
They Hide their Contact Details and Addresses
Scammers use fake websites, addresses, and phone numbers. They are not verified by the FTC or BBB.
Whether Freedom Debt Relief is a Scam ot Not
Based on the above red flags, let’s conclude whether Freedom Debt Relief is a scam or not.
All the information about Freedom Debt Relief is available on their official website. Their online client service dashboard is available 24/7. They have given extensive information about their relief programs, policies, practices, and clauses. Using the information available on their website, you can contact Freedom Debt Relief when you feel ready. Once you take the first step by contacting the company, the certified debt consultant guides you through the whole procedure without any pushy tactics.
Moreover, Freedom Debt Relief doesn’t charge you up front. They only ask for the fees once the negotiation succeeds and both creditors and you give approval to the settlement plan. During the whole process of negotiation, Freedom Debt Relief never asks you to cut off from your creditor. They give proper scripts and guide you on how to talk to your creditor during negotiations.
So, based on all the evidence available on the website about their legitimacy and the absence of all the above red flags, we can claim that FREEDOM DEBT RELIEF IS NOT A SCAM BUT LEGIT.
Now, as we know that Freedom Debt Relief is not a scam. Let’s go through how it works, so if you are thinking about contacting the company, you already know the whole procedure.
How Freedom Debt Relief Works
Freedom Debt Relief operates in a very simple and easy way. They negotiate with your loan provider and try to reduce your total debt amount. They offer a creditor a lump-sum settlement payment in exchange for a reduced debt amount. This whole process involves the following steps:
- Free consultation and debt evaluation: When you contact the company, the certified debt consultant assesses your financial condition and determines if you qualify for the debt relief program or not.
- Dedicated account setup: If you are eligible for the program, you will be enrolled in the debt relief program. The company will open an FDIC-insured account for you. Now, you will stop paying your debt provider and instead deposit your amount in your new account. You have full control of your new account.
- Negotiation: Freedom Debt Relief’s team negotiates with your creditor to reduce your total debt amount. During the whole process, your amount in the FDIC-insured account keeps increasing. Negotiation is not an easy and immediate process; it takes time.
- Approval and payment: Once the settlement happens, you are informed about it. After your prior approval, the agreed-upon amount is paid to the creditor from your dedicated account.
Now, you know the whole process, let me tell you whether you are eligible for the Freedom Debt Relief or not.
Eligibility Criteria
Freedom Debt Relief only works with unsecured loans like personal loans, credit card debts, and medical bills. The company won’t deal with secured loans like mortgages. To qualify for the relief program, you must owe at least $7,500 in unsecured debt. Moreover, you have to show proper evidence that you are facing financial hardship and won’t be able to repay the full debt. You must have sufficient income to make monthly program deposits in an FDIC-insured account.
In the practical world, nothing is free. As, Freedom Debt Relief is serving in debt relief, there must be some charges. Although fees are not upfront, the company does charge clients after successful negotiations.
Fees
The fee structure of the company is performance-based. Clients only pay when debts are settled successfully. These fees are significant and range from 15% to 25% of the total debt enrolled in the program. Moreover, the company charges about $9.95 for monthly service charges, too.
Do you want to know what Customers say about freedom debt relief? Watch this video!
FAQs About Freedom Debt Relief
Is Freedom Debt Relief a scam?
No, Freedom Debt Relief is not a scam but an industry leader in debt settlement. It has been settling debt since 2002 and is verified by the FTC and BBB. Since its inception, the company has relieved over one million clients and resolved more than $20 billion in debt. But being legitimate does not mean it’s for everyone. Along with this, all the information about the company is openly available on their official website.
Why do people think Freedom Debt Relief might be a scam?
Some people think of Freedom Debt Relief as a scam because of their mindset of immediate debt resolution, which is unrealistic. Moreover, the company has faced lawsuits by the Consumer Financial Protection Bureau for mishandling disclosures and fees. These lawsuits were later settled by Freedom Debt Relief. Just because of these reasons, people frequently ask about the legitimacy of Freedom Debt Relief.
How does Freedom Debt Relief protect clients compared to scams?
The company never contacts you first to resolve your debts or asks for an upfront fee. They encourage clients to keep in contact with their creditors and provide them with scripts and proper guidance about conversing with their providers during negotiations. Moreover, their contact information is openly available on their official site. The company charges fees based on their performance, which means they charge only when debts are settled.
Who qualifies for Freedom Debt Relief programs?
To qualify, you must have at least $7,500 in unsecured debt such as personal loans, medical bills, or credit card debt. You must also show proof of financial hardship and have a steady income to make monthly deposits into an FDIC-insured account.
What fees does Freedom Debt Relief charge?
The charges are not upfront, but once everything gets settled, FDR charges clients 15% to 25% of the total enrolled debt. Moreover, there are $9.95 monthly service charges, too.
