New York Takes a Second Bite: Debt Relief Company Pays Another $3.6 Million over Allegations of Settlement Breach

  • New York AG Letitia James reached a settlement with debt relief companies Freedom Debt Relief, LLC and Freedom Financial Network, LLC (collectively “FDR”) to resolve allegations that FDR used misleading advertising to attract consumers in violation of its obligations under a 2011 assurance of discontinuance it entered into with the New York AG’s office.
  • According to the AG’s office, under the terms of the 2011 assurance of discontinuance, FDR paid over $1.2 million and agreed to change a number of marketing practices to comply with state and federal law, including refraining from advertising certain savings its programs could help consumers achieve unless those savings were really achieved by the majority of consumers or unless it disclosed specifically which defined group of consumers achieved such savings. But FDR allegedly failed to comply with its advertising obligations, and the majority of its New York customers saw less than half of the savings FDR advertised.
  • Under the terms of the proposed consent order, FDR will pay $3.6 million to the AG’s office to be used for restitution, provide an electronic database of New York consumers eligible for restitution, and be subject to additional injunctive terms, including more stringent disclosure requirements.