A federal agency has settled with Freedom Debt Relief, an arm of Freedom Financial, for deceptive business practices. Freedom Financial has offices in Tempe and San Mateo, California.

The company’s pitch is it will negotiate with your creditors to lower the amount you owe. In exchange, it will receive a fee, typically 18% to 25% of the amount of debt enrolled in the program.

But in a federal complaint filed in 2017, the Consumer Financial Protection Bureau alleged Freedom Debt Relief sometimes did not deliver on its promises and yet still charged a fee. 

The agency also said Freedom Debt Relief did not tell new customers that some big corporations, like Chase, American Express, and Discover, do not negotiate with debt settlement companies at all as a matter of company policy. 

Freedom Debt Relief settled the federal complaint for $20 million in restitution to the harmed customers and a $5 million civil penalty.

Andrew Pizor, staff attorney at the National Consumer Law Center, a consumer advocacy group, said Freedom Debt Relief is one of the biggest companies doing debt settlement.

“And if one of the biggest and most above-board players is doing this, you can only imagine what the smaller, fly-by-night ones are doing,” Pizor said.

Pizor suggested that if you have high debts, call creditors yourself or talk to a bankruptcy attorney.

“Most people who try debt settlement end up worse off and some of them even end up in bankruptcy,” he said, “which is what they were hoping to avoid in the first place.”

In a statement, Freedom Financial Network said in part, “Over the past year and a half, we have worked closely with the Bureau to address their concerns, provide insights into our debt relief program, and to ensure that we continue to serve our clients. In resolving the case, we have agreed to make some changes to our disclosures and policies to enhance our program, many of which were implemented when the case was first filed.”