Freedom Debt Relief
Encyclopedia
Freedom Debt Relief is a debt settlement company based in San Mateo, California, and is a wholly owned subsidiary of Freedom Financial Network, LLC a financial service company headquartered in San Mateo California. The company has served more than 100,000 clients since its inception in 2002. Freedom employs more than 600 employees across the U.S.
and Bradford Stroh
, two Stanford Graduate School of Business
alumni. "One thing that was clear was that consumer debt was a problem, and had been for decades," said co-founder Housser in a 2007 interview. "We looked long and hard at the collection industry ... you have the biggest companies in the world -- banks, collectors, law firms -- all ganging up on the consumer, who has no advocate. We saw an opportunity," Housser said.
The company negotiates on behalf of indebted consumers who are experiencing a financial hardship with the goal of avoiding bankruptcy (Chapter 7
or Chapter 13
) by settling their unsecured debt
at a discount to the principal owed. The company primarily serves consumers for whom debt consolidation
or home refinancing
is undesirable or an unavailable option, and those who cannot afford either the credit card minimum payments or the payments required in a credit counseling
or a debt management plan.
With the passage of Bankruptcy Abuse Prevention and Consumer Protection Act
and the financial crisis of 2007-2009, debt relief
options for consumers significantly decreased (with both bankruptcy
and mortgage refinance becoming much harder to qualify for), increasing the demand for debt settlement.
On November 4, 2009, Andrew Housser, co-founder and co-CEO, and Robert Linderman, general counsel, participated as panelists at the Federal Trade Commission's public forum on "Debt Relief Amendments to the Telemarketing Sales Rule." The forum discussed proposed fee regulation, and rules to eliminate deceptive and abusive telemarketing of debt relief services
In a letter to the FTC, Linderman stated in the first nine months of 2009 alone, Freedom Debt Relief successfully settled approximately 40,000 accounts aggregating more than $206 million of unsecured debt with savings to consumers in excess of $120 million. On November 11, 2009, the company announced it had settled more than $500 million dollars in consumer debt since its founding
Working with nearly 100,000 clients since 2002, FDR reached the $1 billion mark in December 2010, in face value of debt settled, by negotiating settlements on 188,000 individual creditor accounts for its clients becoming the first debt resolution company in the country to reach $1 billion in cumulative debt it has resolved for clients. Housser was quoted saying “The achievement of obtaining $1 billion in settled debt – not just offers, but completed settlements – for consumers is positive proof of FDR’s ability to assist individuals who are in serious debt. From truly humble beginnings, FDR has maintained its singular commitment to save as much money as possible for each client who turns to the company for debt relief.”
At the state level, not all states require licensing, but Freedom Debt Relief has supported successful efforts to create licensing requirements in Delaware, Iowa, and Minnesota and became the first to company to awarded licenses to provide debt settlement services in those states. In addition to Delwarare, Iowa and Minnesota, Freedom Debt Relief is also currently licensed to do business in the following states: Maine, Kentucky, Utah and Colorado.
Since the creation of the current regulations, there have been a number of legal disagreements between regulators and the debt settlement industry. The legacy of the non-regulated debt settlement industry did set-off several legal battles between Freedom Debt Relief and several states. To bring closure to these legal stand-offs, Freedom Debt Relief agreed to settle with the states that had filed complaints during the pre-regulation era. In every case, the complaints were settled with Freedom Debt Relief being found free of any wrong doing or liability. As part of some of the settlements, the company did offer reimbursement funds to the states (New York for example) and a limited number of qualifying individuals involved in the complaints.
Company History
The company was founded in 2002 by Andrew HousserAndrew Housser
Andrew Housser is a financial expert and entrepreneur who co-founded, with Bradford Stroh, Freedom Financial Network, which provides consumer finance services through its divisions: Freedom Debt Relief, Bills.com, Freedom Tax Relief and Freedom Mortgage....
and Bradford Stroh
Bradford Stroh
Bradford G. Stroh is an entrepreneur, who has founded and led several companies, and also an author. Stroh co-founded Freedom Financial Network and several related specialty finance businesses...
, two Stanford Graduate School of Business
Stanford Graduate School of Business
The Stanford Graduate School of Business is one of the professional schools of Stanford University, in Stanford, California and is broadly regarded as one of the best business schools in the world.The Stanford GSB offers a general management Master of Business Administration degree, the Sloan...
alumni. "One thing that was clear was that consumer debt was a problem, and had been for decades," said co-founder Housser in a 2007 interview. "We looked long and hard at the collection industry ... you have the biggest companies in the world -- banks, collectors, law firms -- all ganging up on the consumer, who has no advocate. We saw an opportunity," Housser said.
The company negotiates on behalf of indebted consumers who are experiencing a financial hardship with the goal of avoiding bankruptcy (Chapter 7
Chapter 7, Title 11, United States Code
Chapter 7 of the Title 11 of the United States Code governs the process of liquidation under the bankruptcy laws of the United States...
or Chapter 13
Chapter 13, Title 11, United States Code
Chapter 13 of the United States Bankruptcy Code, codified under Title 11 of the United States Code, governs a form of bankruptcy in the United States that allows individuals to undergo a financial reorganization supervised by a federal bankruptcy court. The goal of Chapter 13 is to enable...
) by settling their unsecured debt
Unsecured debt
In finance, unsecured debt refers to any type of debt or general obligation that is not collateralised by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment....
at a discount to the principal owed. The company primarily serves consumers for whom debt consolidation
Debt consolidation
Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan....
or home refinancing
Refinancing
Refinancing may refer to the replacement of an existing debt obligation with a debt obligation under different terms. The terms and conditions of refinancing may vary widely by country, province, or state, based on several economic factors such as, inherent risk, projected risk, political...
is undesirable or an unavailable option, and those who cannot afford either the credit card minimum payments or the payments required in a credit counseling
Credit counseling
Credit counseling is a process that involves offering education to consumers about how to avoid incurring debts that cannot be repaid through establishing an effective Debt Management Plan and Budget...
or a debt management plan.
With the passage of Bankruptcy Abuse Prevention and Consumer Protection Act
Bankruptcy Abuse Prevention and Consumer Protection Act
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 , is a legislative act that made several significant changes to the United States Bankruptcy Code...
and the financial crisis of 2007-2009, debt relief
Debt relief
Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves...
options for consumers significantly decreased (with both bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
and mortgage refinance becoming much harder to qualify for), increasing the demand for debt settlement.
On November 4, 2009, Andrew Housser, co-founder and co-CEO, and Robert Linderman, general counsel, participated as panelists at the Federal Trade Commission's public forum on "Debt Relief Amendments to the Telemarketing Sales Rule." The forum discussed proposed fee regulation, and rules to eliminate deceptive and abusive telemarketing of debt relief services
In a letter to the FTC, Linderman stated in the first nine months of 2009 alone, Freedom Debt Relief successfully settled approximately 40,000 accounts aggregating more than $206 million of unsecured debt with savings to consumers in excess of $120 million. On November 11, 2009, the company announced it had settled more than $500 million dollars in consumer debt since its founding
Working with nearly 100,000 clients since 2002, FDR reached the $1 billion mark in December 2010, in face value of debt settled, by negotiating settlements on 188,000 individual creditor accounts for its clients becoming the first debt resolution company in the country to reach $1 billion in cumulative debt it has resolved for clients. Housser was quoted saying “The achievement of obtaining $1 billion in settled debt – not just offers, but completed settlements – for consumers is positive proof of FDR’s ability to assist individuals who are in serious debt. From truly humble beginnings, FDR has maintained its singular commitment to save as much money as possible for each client who turns to the company for debt relief.”
Regulatory Issues & Legal History
Freedom Debt Relief has played a prominent role in promoting consumer protection legislation and regulation. In 2009 Freedom Debt Relief contributed to and supported the passing of federal regulatory measures that brought additional consumer protections to the industry*. During the drafting the of the new regulations, the Federal Trade Commission received testimony from Freedom Debt Relief clients from around the country -- including California, Oregon, Texas, Wisconsin, Michigan, Ohio, and Colorado – confirming Freedom Debt Relief’s high ethical standards, pro-consumer conduct, and the effectiveness of their debt relief program.At the state level, not all states require licensing, but Freedom Debt Relief has supported successful efforts to create licensing requirements in Delaware, Iowa, and Minnesota and became the first to company to awarded licenses to provide debt settlement services in those states. In addition to Delwarare, Iowa and Minnesota, Freedom Debt Relief is also currently licensed to do business in the following states: Maine, Kentucky, Utah and Colorado.
Since the creation of the current regulations, there have been a number of legal disagreements between regulators and the debt settlement industry. The legacy of the non-regulated debt settlement industry did set-off several legal battles between Freedom Debt Relief and several states. To bring closure to these legal stand-offs, Freedom Debt Relief agreed to settle with the states that had filed complaints during the pre-regulation era. In every case, the complaints were settled with Freedom Debt Relief being found free of any wrong doing or liability. As part of some of the settlements, the company did offer reimbursement funds to the states (New York for example) and a limited number of qualifying individuals involved in the complaints.
Accreditation's/Certifications
- Accredited member of The Association of Settlement Companies (TASC)
- Accredited member of The American Fair Credit Council (AFCC)
Awards
- Winners of 2008 Ernst & Young Entrepreneurs of the Year for the Northern California region.
- Recognized as one of the Best Places to work in 2008 by both the San Francisco Business Times and the Phoenix Business Journal
- Andrew Housser and Brad Stroh, named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list.
Community involvement
Freedom Debt Relief supports the following organizations in the community. It does this in equal parts through volunteering employee time and through direct donations.- Best Buddies
- Child Advocates
- The Family Giving TreeThe Family Giving TreeThe Family Giving Tree is a charitable organization that strives to alleviate the consequences of poverty in the California Bay Area. The organization is based on the principle of helping those in need and inspiring philanthropy in the community...
- Give Something Back
- Glow Foundation
- Samaritan House
- Second Harvest Food Bank