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Freedom Debt Relief, Chase Bank, & Nonprofit Credit Counseling

Posted by: Steve Rhode December 2, 2011 in Debt Relief Industry

In a recent story that a reader brought to my attention, Freedom Debt Relief did a good thing and fully refunded a disgruntled California couple the $3,290 fee they paid Freedom Debt Relief for advanced fee debt settlement services after they got sued and Chase Bank said they would not work with Freedom.

A double pat on the back to Freedom for giving the refund. That was the smart and right things to do.

That’s not the part of the original story, here, that caught my eye.

It was the bit about Chase Bank said they would not work with a for-profit debt settlement company but would work with non-profit credit counselors.

But a year into the agreement with Freedom Debt Relief, the Theriaults got a call from Chase, one of their two creditors.

“They contacted us and said ‘we will not deal with Freedom Debt,’” Sherry Theriault recounted.

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Chase sent ConsumerWatch a statement confirming it “does not work with debt-settlement companies.”

The company said it will work with non-profit credit counseling agencies.

Frankly, the position of Chase Bank stinks and not one I find to be consumer friendly. One could argue that since Chase Bank exercises more control over credit counseling groups by controlling their funding that they would rather steer the consumer that way rather than let the consumer find independent help.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Negotiator

    typically, Chase outsources their deliquent debt to Fred hanna assoc. or zwicker. Even though, they are both law firms, they will settle for generally between 35% to 50% up to 12 payments. Once the account charges off, if the account is still held within Chase’s internal recovery dept, they will settle for as low as 25% to 35% lump sum or 40% up to 4 payments. Dont be confused that chase will not settle, its a lie to get you to pay 100% of the balance plus interest.

  • Anonymous

    At some point Chase will likely see the light. In the meantime, most people enrolled in settlement programs will simply address their other debts first. If the account is not very big, it is likely Chase will charge it off and the debt buyer will agree to settle.

    The sad thing is that Chase’s current stance is to only deal with attorneys for settlement- To me, that says Chase is inadvertently supporting the up-front fee attorney model, which collects their fees before any settlements are made. Since so many people see their financial picture change over time, either better or worse, this is a huge part of where that model typically fails the consumer. I don’t understand their thought process here- One would think Chase would prefer to deal with performance base companies like Bank of America. My guess is that Chase does not even know what they are doing here- that the accountants have convinced them this year not to deal with settlement companies, with no understanding of the current business. Eventually they will see that everyone else is getting paid and they will change.  

    • http://GetOutOfDebt.org Steve Rhode

      It is a very odd position by Chase. They say they will only work with attorney model companies who have taken the fees up-front, leaving the consumer with less money to settle quickly.

      • Fitz

        I know this is going upset a lot of people, but as I laid out in an article on this site, I don’t know how DSCs do it. Chase is not looking at how the consumer rep makes money (up front or not) or what is or is not in the consumer’s “best interests” as clearly, it is thier view that DSCs are not in their customers best interests, however they are paid. They are looking at exposure (and “interference”) in who they are dealing with in regards to the financial products “their” customer has with them. While it is also true that they would like to see DSCs eliminated, they know they can’t get rid of attys representing consumers… Also clear is that they do not like consumer attys and if they could get rid of them too they would.

      • http://GetOutOfDebt.org Steve Rhode

        I agree, the only party not wanted around by Chase is the DSC that is representing the consumer. Still, it’s a policy that I hope makes financial sense for Chase but logically it seems a bit vacant.

  • Anonymous

    At some point Chase will likely see the light. In the meantime, most people enrolled in settlement programs will simply address their other debts first. If the account is not very big, it is likely Chase will charge it off and the debt buyer will agree to settle.

    The sad thing is that Chase’s current stance is to only deal with attorneys for settlement- To me, that says Chase is inadvertently supporting the up-front fee attorney model, which collects their fees before any settlements are made. Since so many people see their financial picture change over time, either better or worse, this is a huge part of where that model typically fails the consumer. I don’t understand their thought process here- One would think Chase would prefer to deal with performance base companies like Bank of America. My guess is that Chase does not even know what they are doing here- that the accountants have convinced them this year not to deal with settlement companies, with no understanding of the current business. Eventually they will see that everyone else is getting paid and they will change.  

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