No, Freedom Debt Relief is not a scam, but you should understand that CFPB has sued Freedom Debt Relief, and we also wrote a detailed expose on the topic of whether Freedom Debt Relief lies. For example, will they tell you about lawsuit likelihood? Will they be upfront on the fees?
We will cover all that and more in this article including why Freedom Debt Relief is not a scam, how much it charges, Freedom’s reviews, why people consider debt relief as a scam, alternatives to Freedom, and whether you should sign up for Freedom Debt Relief
Understand Freedom Debt Relief Legitimacy
A financial scam is where you are expecting one result and are frauded into another result. While Freedom Debt Relief has a number of negative reviews, let’s cover some of the things that show how it’s not a scam.
- Freedom maintains an A rating on BBB with a 4.32 rating based on 1352 reviews. The company has been in business for 19 years.
- Freedom Debt Relief is an accredited member of the American Fair Credit Counsel.
- While CFPB sued Freedom Debt Relief, CFPB did not label Freedom Debt Relief a financial scam or fraud. This is important because CFPB does come after companies to shut them down.
Even though Freedom Debt Relief is not a scam, let’s cover some thing that you need to know whether you should work with Freedom Debt Relief, including:
- The Freedom Debt Relief Reviews
- Freedom Debt Relief Review.
How Much Does Freedom Debt Relief Charge?
One of the most important things to understand about Freedom Debt Relief is the fees that they charge. Many companies charge a percentage of enrolled debt, and Freedom Debt Relief is no different.
For example, Freedom states that it charges between 15-25%, but if you look closer, you can see that they say the average is 21.5%.
Those fees are high compared to the companies that we work with that charge 15%. I’ll specify how much you can save using the calculator below and a separate calculation. If you’d like to estimate the cost, you can actually take our debt settlement and cost calculator below.
So, let’s say you have an enrolled debt amount of $50,000. If Freedom charges you 21.5% of enrolled debt, you would pay $10,750 in fees. That said, if you went with a company that charges 15% in fees, you would only pay $7500, which is $3250 in the difference of fees!
That is a huge difference.
Let’s next cover the Freedom Debt Relief reviews.
What Are Freedom Debt Relief Reviews?
There are a lot of Freedom Debt Relief reviews, and not all are positive. For this reason, we would suggest taking the debt settlement cost calculator above, so you can compare various debt relief companies.
Freedom Debt Relief Reviews by site:
- Google: Surprisingly, there are no Google reviews for Freedom Debt Relief, which I find shocking as there are reviews for most sites.
- Yelp: 1.5 rating based on 31 reviews.
- BBB: 4.3 rating based on 1352 reviews
- TrustPilot: 4.5 rating based on 36,424 reviews
As I find that Google and Yelp reviews tend to be unbiased, I would have liked to see a lot more of the number of reviews there. For example, many companies ask for an individual to review their site soon after starting the program, which may artificially inflate the reviews.
Be Aware Of This
One of the things that you need to be aware of is that Freedom Debt Relief may try to provide a high interest loan when you make a certain number of payments in the program.
Essentially, this means that you may have to pay Freedom Debt Relief 3 separate fees:
- The interest rate on the loan
- The origination fee of the loan
- The debt settlement program fees.
Check out this review that highlights what they experienced.
As such, please consider watching our video below that covers 7 crucial questions to ask Freedom Debt Relief today.
Why Do People Say Debt Relief is a Scam?
Dave Ramsey, the personal finance guru, says debt relief companies are complete scam artists, and CFPB has taken action against debt settlement companies.
It’s no surprise that these companies have a bad reputation. Let’s cover 3 reasons why people think of debt relief companies as scams.
Not Upfront About Fees
Before Dodd Frank, debt relief companies would charge fees before they would actually settle debts. This resulted in many people getting scammed with a lot of fees and no actual results of debts settled.
Thankfully, with updates to the laws in 2010, many debt relief companies can only take fees AFTER the first settlement has been made. This means that they actually have to settle debt to take their fee.
Secondly, many debt settlement companies still do not explain how the fees structure works, requiring that you read the client services agreement to figure out how much they are charging you.
Not Upfront About Results
Many companies are not upfront about the results. For example, you may sign up for a 36 month plan, but after many settlements, you now either have to increase the amount you pay each month or increase the number of months.
This can be a combination of the debt relief company trying to make the sale at the beginning or just not being good at estimating how much a creditor will settle for.
Not Honest About Cons
Many debt relief companies downplay whether you will be sued by your creditors, the tax implications of debt settlement, and additional cons of debt settlement.
These are major cons that you really should consider before joining a debt relief company. Not all companies sue which is why we built this creditor lawsuit likelihood calculator.
Should You Sign Up For Freedom Debt Relief?
So, Freedom Debt Relief is not a scam, but that doesn’t necessarily mean you should sign up for them. Understand the Freedom Debt Relief pros and cons and take the calculator below to understand how much debt settlement may cost and your alternatives.
