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.

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.
- Who Knew TitleMax Sucked This Bad? - February 23, 2023
- Litigation Practice Group Lawsuit by Business Partner All Service Financial – We Want Our Money - January 24, 2023
- HomeAdvisor and Angi to Pay Up To $7.2 Million and Stop Deceptively Marketing its Leads for Home Improvement Projects - January 23, 2023
Steve, are you sure you have the tile of this article right?
“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.”
Seems like CNI is suing FDR…
FDR filed the case.
Sell leads for above market prices using a revenue sharing model to a company who is not following rules and laws in a given state and expect to be seen as having clean hands?
This will be a curious one to watch.
There were some funky federal laws passed where many of these companies converted to marketing a now failing upfront fee model using attorney names as a front to legitimize the fees. The consumer actions filed against these 2 companies predate the FTC rules. There were 4 other consumer actions referenced in the action filed by FDR. Wonder what those timelines look like.
Substantial assistance post funky federal law – we shall see.
Did the lead seller refer consumers to the services of a lead buyer who could later be found to have enrolled people into programs that operated outside of federal laws post enactment?
Interesting if so.
In today’s regulatory climate, lead sellers are on the hook…. big time. Ones who have no argument that they were not aware especially so.
Maybe the lead seller had no choice but to bring this as a result of the assertions of the insurer. Doesn’t really matter now. Cats out of the bag. Any actions brought against the lead buyer that involve post federal law timelines can be pursued against the lead seller as having provided substantial assistance by state and federal agencies with the will to pursue it, and if I am not mistaken, also through private right of action.
The wheels on the bus fall off off off……. off off off….. off off off…..
Â