Is Freedom Debt Relief a Scam? 

If you’re thinking of using Freedom Debt Relief, you need to know if it’s safe. Is Freedom Debt Relief a scam? 

Below, we explain whether Freedom Debt Relief is a scam and discuss some steps you can take to improve your safety when using this platform. 

What Is Freedom Debt Relief?

Freedom Debt Relief is a firm that specializes in debt settlement, i.e., they negotiate with creditors on your behalf to settle debts for less than you owe. 

It’s one of the largest debt settlement companies in the US.

Freedom Debt Relief was founded in 2002 and is headquartered in San Mateo, California. 

Is Freedom Debt Relief a Scam?

No, Freedom Debt Relief is not a scam. It’s a legitimate debt settlement company. However, it’s not risk-free (no debt settlement company is). 

Freedom Debt Relief has been reviewed by multiple third-party publications and review sites, including CBS News, CNBC Select, NerdWallet, U.S. News, and Business Insider.

Several publications have also rated Freedom Debt Relief. For example, Bankrate scores Freedom Debt Relief as 4.1 out of 5.0 stars, FinanceBuzz gives it a rating of 4.5 out of 5.0 stars, and LendEDU rates it as 4.6 out of 5.0 stars. 

However, nearly every review warns consumers that using a company like Freedom Debt Relief is likely to result in a temporary decrease in their credit score. They also warn that debt balances may increase due to fees and interest, and that there’s no guarantee that creditors will negotiate. 

NerdWallet also warns that debt settlement is risky and that there’s no guarantee of success. Before signing up with a company like Freedom Debt Relief, NerdWallet recommends exploring other options, like a debt management plan. 

User reviews of Freedom Debt Relief are mostly positive:

• 4.6 out of 5.0 stars (from 46,568 reviews) on Trustpilot.
• 4.3 out of 5.0 stars (from 33,973 reviews) on ConsumerAffairs.
• 4.4 out of 5.0 stars (from 1,774 reviews) on Better Business Bureau. 

In particular, people praise Freedom Debt Relief’s customer service, frequently describing the representatives by name and stating that they were kind, patient, and thorough. Several individuals said complex or scary moments (lawsuit threats, confusion about letters) were eased by support.

A handful cited pushy or dismissive reps or difficulty getting items updated/removed after outside settlements.

Multiple people reported a significant impact on their credit scores early on, with some noting that it recovered later, while others complained about high fees. 

On online forums like Reddit, many people (i.e., those who don’t just dismiss every debt settlement company as a scam and recommend going the DIY route) report positive experiences with Freedom Debt Relief. 

In particular, people talk highly about Freedom Debt Relief’s legal help in the event that creditors attempt to sue you for debt. 

That said, people also complain about Freedom Relief’s high fees. 

Freedom Debt Relief is Better Business Bureau (BBB) accredited and holds an “A+” rating on the BBB website. It received a total of 314 complaints on the BBB website over the last three years, with 80 of these closed within the past 12 months. (See our review of whether the BBB is a scam).

Lawsuits and settlements

In 2010, Consumer Reports wrote about how Freedom Debt Relief promised to cut consumer debt by up to 50% and settle accounts quickly, but lawsuits and investigations revealed that many clients ended up with more debt, faced collections or lawsuits, and paid significant fees without receiving promised results, leading to refunds, settlements, and regulatory scrutiny.

In 2019, the Consumer Financial Protection Bureau settled its lawsuit against Freedom Debt Relief for engaging in deceptive practices, requiring the company to pay $20 million in restitution and a $5 million penalty. Victim compensation was distributed between October 2020 and December 2022.

Terms of service

It’s always a good idea to read a company’s terms of service before you sign up for its products or services.

Though we advise you to read Freedom Debt Relief’s terms of service in full, here are some points from it you won’t want to miss:

• Services and content are provided “as is” with no guarantees of accuracy or results.
• The company’s maximum liability is limited to $100.
• Mandatory binding arbitration for all disputes (no court or jury trial). No class actions allowed (disputes must be handled individually).
• The company does not guarantee approval for any product or service, the lowest available rates, or the availability of products in all states.
• By submitting a form, you authorize soft credit inquiries (which do not affect your score) and the sharing of your information with Providers for matching purposes.
• Submitting a form opts you in to receive calls, texts, and emails, including automated dialers and prerecorded messages. These can come from Freedom Debt Relief and multiple third-party Providers.

Security

In its privacy policy, Freedom Debt Relief briefly describes the security measures it has in place.

It says it maintains “industry standard technical and physical safeguards” to keep your information safe, including TLS encryption and restricted facility access. 

It also has a separate section for Social Security Number security. 

Here, it states that it prohibits the unlawful disclosure of customer SSNs and limits access to them to personnel who require them to perform their jobs. 

Freedom Debt Relief does not disclose SSNs to third parties except as required/permitted by law. 

In 2023, Freedom Debt Relief experienced a data breach in which certain documents containing sensitive consumer information were inadvertently accessible to others due to a flaw in its dashboard system. 

Personal details exposed included names, Social Security numbers, and creditor account numbers of the affected clients. 

Privacy 

Freedom Debt Relief describes the kind of data it collects, for what purposes, and with whom it shares it in its privacy policy.

It collects the following information:

• Information you provide, such as your full name, email address, phone number, address, date of birth, employment, salary, etc.
• Information from third parties, such as credit reporting data and lead generation data.
• Information from your participation in contests or surveys, such as your characteristics, preferences, attitudes, intelligence predispositions, etc. 
• Information from tracking technologies, such as cookies.

The company uses this data to provide and improve services, market products/services (its own and affiliates’), verify identity and eligibility, respond to inquiries, and process payments. Plus, for analytics, security, and internal administration, and to send push notifications and personalized ads.

Freedom Debt Relief can share your information with affiliates (to market products/services), service providers, and nonaffiliated third parties (including financial services companies, credit reporting agencies, and law enforcement when required). 

It may also sell and share aggregate, anonymized data.

Users can opt out of promotional emails and texts, as well as information sharing, by completing an online form, clicking “Unsubscribe,” or calling Freedom Debt Relief. 

So, Should You Use Freedom Debt Relief?

Depends.

The general recommendation is to exhaust all other options before considering companies like Freedom Debt Relief. 

How to Use Freedom Debt Relief Safely and Privately 

• Confirm that Freedom Debt Relief is right for you. Before signing anything, ensure that debt settlement is the best overall fit for your situation. This typically means having over $10,000 in unsecured debt, being behind on payments, struggling to afford the minimum payments, not qualifying for low-interest debt consolidation loans, and being prepared for a temporary drop in credit score and potential collection calls.
• Understand the fees. Ensure you understand the total amount you will pay, how fees are deducted, and other relevant details. 
• Understand the timeline. Freedom Debt Relief programs typically last 24 to 48 months. During this time, you won’t be making payments to creditors, so expect collection calls, potential lawsuits, and temporary credit score damage.
• Request debt validation. If a collector contacts you, ask for written proof before paying anything.
• Know your state’s laws. Some states have strong debtor protections. It’s worth knowing these in case creditors threaten legal action.
• Use Freedom Debt Relief’s legal support. If a creditor sues you, Freedom Debt Relief offers legal assistance in many cases.
• Limit data sharing and spam. FDR shares your data with affiliates and marketing partners. To protect your privacy, use a separate email address and Google Voice number for sign-ups. After enrolling, opt out of marketing communications by clicking “Unsubscribe” in emails and calling Freedom Debt Relief to request removal from affiliate marketing lists.
• Double-check settlements before paying. Always review settlement agreements before Freedom Debt Relief finalizes them. Ensure the creditor agrees to mark your account as “Settled” or “Paid in full” and that fees match what you agreed to.