Freedom Debt Relief Execs Participate in FTC Panel

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Company leads industry efforts in help to regulate debt settlement sector.

In the debt relief industry, that means consumers can choose between a contingency fee model and fixed-fee structure - whichever they believe will work best for them.

Freedom Debt Relief (FDR) continues to lead industry efforts to assist and educate those federal and state agencies that have authority to regulate the debt settlement sector - with recent efforts extending to the Federal Trade Commission.

This past week, Andrew Housser, co-founder and co-CEO, and Robert Linderman, general counsel, participated as panelists at the FTC's public forum on "Debt Relief Amendments to the Telemarketing Sales Rule." The forum, which took place in Washington, D.C., Nov. 4, discussed proposed fee regulation, and rules to eliminate deceptive and abusive telemarketing of debt relief services.

The executives provided detailed insight into the direct effects the FTC's proposed advance-fee ban would have on consumers, as well as data on FDR's record-breaking settlement rates. They also presented context on the debt settlement sector, speaking to the complex legal issues that flow from trying to use regulations that govern telemarketing activity to regulate the debt settlement industry.

Quoting from the comment letter FDR submitted in response to the FTC's Notice of Proposed Rulemaking, Housser explains that "it is not in the interest of consumers for the FTC to impose a ruinous 'advance-fee' prohibition on FDR and other debt settlement companies…when the Agency can address perceived abuses more directly - and without substantial adverse impact - through more traditional regulation of marketing practices, such as prohibiting unsubstantiated claims of success or misrepresenting services provided."

He points out that FDR clients derive significant benefit throughout the debt settlement programs, including personal finance education, budgeting and other resources, as well as ongoing settlement services. In fact, since inception of business operations, FDR has settled more than 100,000 accounts for more than 70,000 clients, representing more than $506 million of consumer debt (based on amount owed at time of settlement). The company has achieved average debt reduction of 55.3 percent of the amount owed at the time of settlement - a figure that correlates to an average settlement rate of 44.7 on the balance owed.

FDR is a strong supporter of the fee-regulation approach taken by the Uniform Debt Management Services Act, the model statute regulating the debt settlement industry. This approach, says Linderman, empowers states to regulate fee limits and practices in the context of what those states believe to be in the best interests of their citizens. "In the debt relief industry, that means consumers can choose between a contingency fee model and fixed-fee structure - whichever they believe will work best for them."

"We commend the FTC for kick-starting the debate on the nature and scope of appropriate regulations for the debt relief services industry," Housser says. "We share the FTC's goal of advancing consumer protection, but want to ensure that any regulations do not have the unintended consequences of driving the good companies - those that are dedicating to providing quality services to consumers - from the market."

At the forum, Housser, representing The Association of Settlement Companies, and Linderman, representing FDR, joined a dozen other national panelists, including representatives from the Federal Reserve Bank of Philadelphia, Consumers' Union, the Cox School of Business at Southern Methodist University, the National Conference of Commissioners on Uniform State Laws and the National Association of Consumer Credit Administrators.

About Freedom Debt Relief (
Freedom Debt Relief provides consumer debt settlement services. Working for the consumer to negotiate with creditors and lower principal balances due, the company has served more than 70,000 clients since 2002. Freedom Debt Relief is a wholly owned subsidiary of Freedom Financial Network, LLC (FFN).

Based in San Mateo, Calif., FFN also operates offices in Sacramento and Tempe, Ariz. The company, with 580 employees, was voted one of the best places to work in both the San Francisco Bay Area and the Phoenix area in 2008. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and are recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.


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Aimee Bennett
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