Consumer complaint received 2020-07-20
Product: Debt collection — Credit card debt
Issue: Took or threatened to take negative or legal action — Threatened or suggested your credit would be damaged
Company: FREEDOM FINANCIAL NETWORK (VA)

Complaint Overview I am XXXX years old, this company is forcing me into bankruptcy by gouging me with 25 % interest and offering no alternatives even after 3 attempts to get relief from the excessive interest, and then losing my job due to covid-19 ... 

I am single, do not own property, live in a small apartment, had XXXX XXXX last year, no tangible assets, and at my age, do not care about my credit score as I will not be making any major purchases ( like a house ) at my age and health. 
Consumers need to be warned about the tactics and processes used to keep a person from completing the program, especially the elderly ones like myself, as the {$20000.00} interest alone that was paid over the 2.5 years would have settled all of the outstanding accounts, but instead robbed me of any retirement I might have saved. Instead, the company refused to refinance to a lower rate even though I had made 26 months of on-time payments. 

I was given the excuse that they could only finance 35 % of my yearly income, which would have been {$14000.00}. If this was the rule, how were they able to set me up for a loan of {$27000.00} at 25 % interest?? 

I have been taking medication for XXXX for some time, and if I had been thinking clearly and not scammed with scare tactics of being sued and having my small Social Security check taken, I would NEVER have agreed to such terms! 

Consumers in similar situations also need to realize that I would have been MUCH better off to pursue bankruptcy from the start, and at least would not have lost the {$20000.00} that I can not recover for any retirement money. My credit score does not really matter at my age, as I will not be making any major purchases such as a home, etc. I was not seeking to avoid paying, and could have continued doing so with a more affordable situation, lower rate and payments, at least until I lost my job due to COVID-19. Now I do not know what my future holds. 

I only hope that you can get this information out so others will not fall into the same trap as me. I plan to also send this to the XXXX, as they are always seeking to protect elderly citizens from scams and scare tactics used by businesses, especially with the COVID-19 issue having such an impact on the elderly! 

History Freedom Debt Relief I lost 2 jobs during the recession in XXXX, and was forced to live off of my credit cards, which was OK until I could not obtain employment. Eventually, I could no longer make the minimum monthly payments and decided I had to have assistance and contacted FDR, which assured me they could help with my issue. 

They set up a payment schedule of $ XXXXmonth, which I could barely maintain, but was told I would be sued, have garnishments, etc. if I did not make the payments. 

Once I had money in the account, they did settle a few accounts ; however, they did not tell me that their fees would come out up front, which made it nearly impossible to keep a high reserve in the account, and put me under more stress and pressure. Also, I was taxed on the amount of debt forgiven, which I was not told about. 

So, consumers need to know that they would be just as well off to negotiate and make settlements on their own, as the company charged 20 % of the settlement, and then with the taxed amount, little if any savings was accrued. 

After I had been in this program for about a year, I was told that they had a sister company, XXXX XXXX   that could keep me from being sued by the remaining credit companies by loaning me the full amount needed to pay off the remaining debt. 
According to the representative, I was about to be sued, and have liens and garnishments due to the length of time that the remaining accounts had not been settled, mainly due to the company getting their 20 % out of the funds, making the balance too low to negotiate. 

So, being scared of lawsuits, I entered the program, and somehow was able to continue to make the unbelievably high payment of XXXX XXXX/month as I was working again. After some more time elapsed, the high payments were taking atoll on my overall financial stability, especially with the ridiculous interest rate of 25 %. I was making no progress on the principal as the interest came out first. 

I contacted the company requesting a lower rate due to my length of on-time payments, which were a reflection of my dependability. 

Chain of Events Leading to the Current Situation 1. I paid 26 monthly payments of {$770.00} and only had my principal reduced by {$7000.00}! 
2. I was lulled into the agreement by " SCARE TACTICS '' stating that the credit card companies would sue me, and the C+ loan would prevent that - this was in XX/XX/XXXX 3. After paying this for over a year, I contacted the company on XX/XX/XXXX about getting a lower interest rate as the 25 % was ridiculous ( see attachment # A ) 4. The representative, XXXX, said he could not help, but to try again in 6 months! 
5. The next contact was in XX/XX/XXXX ( XX/XX/XXXX - see attachments # B and C ). I had had it with the high interest, and was really struggling to make the excessively high payments each month. 
I was also told that they could only lend me 35 % of my yearly salary ( which was {$42000.00}, 35 % being {$14000.00} ) This was totally LUDICROUS, and when I asked him how they were able to initially loan me {$27000.00}, there was no response!! 

Also the original note was for {$23000.00}, which included their " settlement fees '' ( see attachments # D and E ). I was also told that this would actually be lower due to the funds in my account from their " sister '' company FDR-however, this was not true, as the amount financed actually increased to {$27000.00}.!! 
6. I made another contact on XX/XX/XXXX ( see attachment # F ). This time, the representative, XXXX XXXX, told me that the ratio of principal to interest was moving in my favor due to the amortization schedule. Still, I had over 2 years left to pay. 
7., My final contact was about 10 days ago, seeking available options as I lost my job due to covid-19, and can no longer make payments. 

I first spoke with XXXX (? ) who indicated the only requirement was 6 months of on-time payments to refinance - as I had 26 months, he said I was eligible and connected me with a finance person, who told me about the 35 % rule. I asked about other options, he said there were none, so I ended the call saying that this made my choice very clear, as I only have one choice that being bankruptcy.. 

Impact on consumers, especially the elderly with no retirement income and those impacted by COVID-19 CONSUMERS NEED TO KNOW THAT THIS COMPANY DOES NOT CARE ABOUT CREDIT REPAIR, BUT ARE SEEKING TO SCARE PEOPLE INTO PAYING HUGE PAYMENTS AT ENORMOUSLY HIGH INTEREST RATES!! THIS IS ESPECIALLY DANGEROUS FOR ELDERLY PEOPLE SUCH AS MYSELF, AS THE {$20000.00} PAID IN INTEREST COULD HAVE BEEN MY RETIREMENT FUND, AS I HAVE NOTHING ELSE!!!