For those that have been involved in the debt world for a number of years the names Freedom Debt Relief (FDR) and Century Negotiations, Inc. (CNI) were linked together through thick and thin under the trade group TASC, (The Association of Settlement Companies). In fact the honcho over at CNI, Dave Leuthold, was even the Executive Director of TASC, under which FDR worked diligently for to help try to get favorable debt settlement legislation passed.
And as recently as April, 2012, both companies had leadership and/or speaking roles in AFCC, (American Fair Credit Council). – Source
That was then. Flash forward to May 16, 2012. That’s the day FDR sued CNI in the Northern District of California.
According to the complaint, Since November 2004, FDR and CNI had an agreement where FDR referred a number of potential clients to CNI.
“When a referral is made by FDR, it is up to CNI to determine whether or not to enroll the customer based upon CNI’s own proprietary underwriting procedures and specific enrollment criteria. A number of these referrals are rejected by CNI as a result of its own independent review. In those instances where CNI chooses to enroll a referred client, it will enter into a written contract with that client, in a form approved by CNI. The client does not enter into any agreement of any sort with FDR.”
Things look like they really began to sour in July of 2010. Around that time a CNI customer, Mr. Webster, filed suit against CNI, FDR and others. But this complaint filed by FDR against CNI alleges that “at no time did Mr. Webster ever enter into an agreement with FDR.”
Another CNI customer filed suit in August of 2010 against CNI and its chief executive officer, David Leuthold. FDR was later added to that suit.
To summarize the case, CNI feels FDR should indemnify CNI for the cases filed and FDR says bollocks. FDR claims they had nothing to do with these clients except pass the lead over to CNI.
You can read the complaint filed, here.
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