State arrives at settlement with Freedom Debt Relief
Nearly 100 New Hampshire residents are dividing $133,604 in a settlement with Freedom Debt Relief because the California company failed to get licensed as a New Hampshire debt adjuster, according to the state Banking Department.
Payments range from $20 to $10,006 and were calculated by subtracting how much more people paid in fees than they received in debt relief.
“We have gotten a lot of phone calls from people who are already receiving their checks and making sure this is a legitimate check,” Deputy Bank Commissioner Ingrid White said Wednesday.
The company also will pay a $54,250 penalty to the banking department under the settlement dated Nov. 19.
“Our philosophy is it shouldn’t be cheaper to do unlicensed business in New Hampshire than if you have the appropriate license,” White said.
She said “a person would hire this company to engage in negotiations with their debtors to reduce the amount of debt that was owed.”
Payment amounts of at least $1,000 went to 51 people. Four of them exceeded $4,000.
“Someone’s going to get a $10,000 early Christmas present,” said Richard Gaudreau, a Salem attorney who filed the initial complaint in 2010 but whose client won’t benefit because they didn’t qualify.
Andrew Housser, CEO of the parent company, Freedom Financial Network LLC, said the company agreed to pay to put the matter behind it.
The license issue was “a little bit of a combination of an oversight and a belief we were not a debt adjuster,” he said. The state’s “definition of a debt adjustor is broader than what typically is understood to be a debt adjuster.”
After the complaint was filed, Housser said his company agreed to service existing New Hampshire clients for free and that it is no longer enrolling new clients because the New Hampshire law puts caps on fees that don’t work with Freedom’s business model.
The New Hampshire law means “a lot of people who have debt problems will be left with only one option, which is bankruptcy, rather than multiple options,” he said.
The banking department’s investigation found 98 of Freedom Debt’s 434 New Hampshire customers paid more in service fees than it received in debt relief, White said.
Checks are being mailed to the last known address that Freedom Debt had on file.
Housser said the company also will try to notify people via phone and email.