Another brief forwarded to me recently by a regulator friend was that of the amicus brief filed by the State of Washington in a private case against Freedom Debt Relief, Freedom Financial Network, Andrew Houser, and Bradford Stroh.
The issue appears to have been if Freedom was in fact a debt adjuster under the Washington Debt Adjusting Act.
The claim by Freedom was that it was not a debt adjuster since “Freedom’s consumers must approve each settlement before the settlement becomes final and in light of the fact that Freedom does not transfer funds to the creditors but instead relies on third parties to do that.”
Freedom is a debt adjuster. What it does fits the statutory definition like a snug shoe. Neither requiring the consumer’s approval of the settlements nor having the consumer’s funds held by a third party creates an exception. The shoe fits and Freedom must wear it. – Source
The State of Washington said “yes”; Freedom is a debt adjuster and the Debt Adjusting Act applies to it.
The brief says “Freedom is a debt adjuster under the DAA, and that it violated the DAA by taking too much in fees and taking them too early, and that all fees should be returned to [plaintiffs] as provided for in the DAA.”
“For the purposes of deciding whether Freedom was a debt adjuster, it does not matter if the consumer had to approve the settlements or whether Freedom, a third party business associate, or the consumer held the funds used to fund the settlements. Freedom still managed and counseled and settled consumer debt and it did so for compensation. That makes Freedom a debt adjuster under the DAA.”
You can read the full brief here.
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