Debt Relief Lawsuits (CROA): Americor, National Debt Relief, Freedom Debt Relief and More

A debt settlement or debt relief company tells you to stop paying your credit cards and other unsecured debts, deposit money into a dedicated account each month, and wait while it negotiates lump-sum payoffs with your creditors. Many of these companies also market the program as a way to "rebuild" or improve your credit once you are through it.

The claims attorneys are investigating fall into four buckets:

• Fees taken too early. Taking settlement or "enrollment" fees out of the dedicated account before any debt is settled, or taking far more than a settled debt's share of the total fee.
• Promises that were not true. Telling customers their credit score would rise, that they would be debt-free in 24 to 48 months, that they would save about half of what they owe, or that creditors would not sue.
• Missing paperwork. No written contract, no separate written rights disclosure, or no notice of the 3-business-day right to cancel that federal law requires when a program is sold as improving your credit.
• Law firm fronts. Programs run through a "law firm" so the company can argue that federal fee rules and state fee caps do not apply.

Since October 27, 2010, federal rules have barred debt relief companies that sell by phone from collecting any fee before they settle at least one of your debts and you make a payment under that settlement (16 CFR 310.4(a)(5)). When the same company promised the program would improve your credit, plaintiffs also invoke CROA, which bars charging for a service before it is fully performed (15 U.S.C. 1679b(b)). Most of the refunds consumers have received so far came from one or both of those rules.

Being named in an attorney investigation is not evidence of wrongdoing. Unless a court has ruled, everything described as a claim or complaint below is an allegation that the company can dispute.

There is no single case to join. What exists is a mix of finished government actions, pending lawsuits, and open attorney investigations. That is why this page is marked as an investigation. If you are new to how that works, see what a lawsuit investigation is.

Finished government actions. The Consumer Financial Protection Bureau settled its lawsuit against Freedom Debt Relief, which it called the nation's largest debt settlement provider, on July 9, 2019, for $20 million in restitution and a $5 million penalty. The New York Attorney General followed on June 23, 2020 with a proposed settlement for nearly $3.6 million. Colorado's Attorney General secured $200,000 in refunds from Americor and its sister lender Credit9 on December 14, 2022.

Pending government case. On January 10, 2024, the CFPB and seven state attorneys general (New York, Colorado, Delaware, Illinois, Minnesota, North Carolina, and Wisconsin) sued Strategic Financial Solutions (StratFS) in the Western District of New York, alleging it collected at least $100 million in illegal advance fees through a web of companies that included law firms. A receiver took over the business. As of the receiver's March 31, 2026 update, a settlement conference failed, motions to dismiss were still pending, and discovery was about to open.

Private lawsuits. In 2026, a putative class action was filed against National Debt Relief in Manhattan federal court, a case listed as a class action was docketed against Beyond Finance in New Jersey, and an individual CROA suit was filed against Five Lakes Law Group in Michigan. None has reached a ruling on the merits.

This table lists actions we verified in court records, agency releases, or reputable news. "Pending" means no court has decided whether the company broke the law.

Company	Action	Date	Outcome
Freedom Debt Relief	CFPB lawsuit	July 9, 2019	$20M restitution, $5M penalty
Freedom Debt Relief	New York AG	June 23, 2020	Nearly $3.6M restitution
Americor, Credit9	Colorado AG	Dec 14, 2022	$200,000 refunds, 2-year enrollment ban
StratFS and affiliated law firms	CFPB and 7 states, W.D.N.Y. 1:24-cv-00040	Jan 10, 2024	Pending; receiver appointed
National Debt Relief	National Advertising Division review	Oct 28, 2025	Told to modify savings and "debt-free" claims
Five Lakes Law Group	Allen, E.D. Mich. 2:26-cv-10775	Mar 9, 2026	Pending individual CROA suit
Turnbull Law Group, Freedom Debt Relief	Georgia AG investigation (reported)	Mar 10, 2026	No charges announced
National Debt Relief	Voegtli, S.D.N.Y. 1:26-cv-04141	May 18, 2026	Pending putative class action
Beyond Finance	Jackson, D.N.J. 3:26-cv-05780	May 20, 2026	Pending; complaint not public
Cambridge Credit Counseling	Zimmerman v. Puccio, 1st Cir.	July 27, 2010	$256.5M CROA class judgment affirmed

The biggest CROA class recovery against a debt program on record is Zimmerman v. Puccio, where the First Circuit on July 27, 2010 affirmed a $256.5 million judgment equal to everything class members paid a debt management company. That case matters for today's investigations because the company sold a debt program, not a credit report service, and it still lost under CROA because it repeatedly told customers the program would improve their credit.

Americor (Americor Funding)

Verified: on December 14, 2022, the Colorado Attorney General announced $200,000 in refunds for 262 Colorado customers of Americor and its sister lender Credit9. The state said Credit9 lent money to Americor debt management customers after being warned that Colorado law forbids that, and that some customer agreements were never signed by Americor. Both companies were barred from enrolling new Colorado consumers for two years. We found no court ruling that Americor violated CROA as of September 2026. Attorneys are investigating Americor, which is not a finding that it did anything wrong. People searching for an "Americor lawsuit" or "Americor class action lawsuit" should know that, as of this update, the verified public record is the Colorado action, not a certified class case.

National Debt Relief

Verified: on October 28, 2025, BBB National Programs' National Advertising Division found that National Debt Relief's "within 24 to 48 months" and "debt-free" messages implied all debt would be gone when the program covers only enrolled unsecured debt, and that its claim of roughly 30 percent savings after fees (50 percent before fees) did not reflect the typical customer. The company said it would comply. Separately, Voegtli v. National Debt Relief, LLC, a putative class action, was filed May 18, 2026 in the Southern District of New York; as of July 2026, the company planned a motion to dismiss. No court has ruled on those claims, and no class has been certified.

Freedom Debt Relief and Freedom Financial Network

Verified: the CFPB settled its lawsuit on July 9, 2019. It alleged Freedom charged advance fees, failed to tell customers about their rights to the money in their dedicated accounts, and charged customers after they negotiated their own settlements. Freedom agreed to pay $20 million in restitution and a $5 million penalty. On June 23, 2020, the New York Attorney General announced a proposed settlement for nearly $3.6 million over advertised savings that broke a 2011 agreement. In March 2026, Atlanta News First reported that the Georgia Attorney General is investigating Turnbull Law Group and Freedom Debt Relief, which answers Turnbull's phones.

Beyond Finance (Accredited Debt Relief)

Verified: Jackson v. Beyond Finance, LLC d/b/a Accredited Debt Relief, No. 3:26-cv-05780, appeared on the New Jersey federal docket May 20, 2026 and is tracked as a class action, but the complaint was not publicly available as of August 2026. We found no government enforcement action against Beyond Finance.

ClearOne Advantage, Alleviate Financial Solutions, and Elite Legal Practice

We found no federal or state government enforcement action or court ruling against these companies on advance-fee or CROA claims as of September 2026. They appear in attorney investigations and in consumer complaints, which are not proof of anything. If you were a customer, your own contract and account records are what an attorney will look at.

Five Lakes Law Group

Verified: Allen v. Five Lakes Law Group PLLC, No. 2:26-cv-10775 (E.D. Mich., filed March 9, 2026), is an individual suit under CROA and Virginia law. The complaint alleges the firm promised improved credit and about 50 percent savings, took large fees after a single settlement payment, and added a roughly $15 monthly charge for a separate legal plan. These are allegations only.

Turnbull Law Group

Verified: Atlanta News First reported on March 10, 2026 that the Georgia Attorney General's consumer protection division is investigating Turnbull Law Group. The report said Turnbull charges 28 percent of the original debt, while Georgia's Debt Adjustment Act caps debt relief fees at 7.5 percent of the monthly payment but exempts the practice of law. Turnbull says the exemption applies because it is a law firm. No charges had been announced.

Strategic Financial Solutions (StratFS)

Verified: the CFPB and seven states allege StratFS used affiliated law firms as a front to collect at least $100 million in advance fees since 2016. A court-appointed receiver now runs the business while the case continues in the Western District of New York. These are allegations; no final judgment has been entered.

The FTC's Telemarketing Sales Rule covers most debt settlement sales because they happen by phone. The FTC added its debt relief provisions in a final rule published August 10, 2010, and the advance-fee ban took effect on October 27, 2010. A company selling debt relief by phone may not request or receive any fee until three things happen:

1. It has settled, reduced, or changed the terms of at least one enrolled debt under a written agreement you accepted.
2. You have made at least one payment to that creditor under the new agreement.
3. The fee for that debt is either a proportional share of the total fee or a fixed percentage of the amount saved.

The rule also controls the dedicated account. The company can have you save in one only if the account is at an insured financial institution, you own the money and any interest, the administrator is not affiliated with the debt relief company, and you can withdraw at any time without penalty and get your balance, minus fees properly earned, within 7 business days.

A common defense is that the customer called the company, not the other way around. That does not help debt relief sellers: the rule's exemption for customer-initiated calls in response to ads expressly excludes ads for debt relief services.

The FTC explained why it banned upfront fees. Before the rule, it found that some providers required customers to pay 40 percent or more of the total fee in the first three or four months, whether or not any debt was settled. The Colorado Attorney General told the FTC that only 7.81 percent of Colorado consumers who entered debt settlement programs from the start of 2006 had completed them by the end of 2008, while 53 percent had dropped out. The FTC also found that the industry's "savings-to-fee" ratios counted only debts that were settled and ignored the growing balances on debts that were not.

CROA was added to federal law on September 30, 1996. Debt settlement companies usually argue it does not reach them because they negotiate debts rather than fix credit reports. Courts look at what the company actually promised, because the Act reaches anyone who sells, for money, a service represented as improving a consumer's credit record, history, or rating. In Zimmerman v. Puccio, the First Circuit held that a debt management company was covered because its sales scripts and mailings kept telling customers the program would improve their credit rating, even though its contract disclaimed any credit promises. The pending Allen suit against Five Lakes Law Group makes the same kind of argument about a debt settlement program.

Once a debt program is covered, these are the rules that matter most:

• No pay before performance (1679b(b)). The company cannot charge or receive money for a service until the service is fully performed. Monthly program fees taken while debts are still unpaid are the usual target.
• No misleading statements (1679b(a)). No one may make untrue or misleading statements about the company's services or engage in any practice that deceives you in the sale. Promised credit score gains and debt-free dates are the usual examples.
• Required disclosure (1679c). Before you sign, you must get a separate written statement titled "Consumer Credit File Rights Under State and Federal Law." The company must keep your signed copy for 2 years.
• Written contract (1679d). It must list the total cost, a detailed description of services, any guarantees, how long the work will take, and the company's address. No services may start until 3 business days after you sign.
• Right to cancel (1679e). You can cancel for any reason before midnight of the 3rd business day, and the contract must include a "Notice of Cancellation" form in duplicate.
• No waivers (1679f). Any waiver of CROA rights is void, asking you to waive them is itself a violation, and a contract that does not comply is void and cannot be enforced by any court.

Under 15 U.S.C. 1679g, a company that violates CROA owes you the greater of your actual damages or every dollar you paid it, plus punitive damages the court allows and your reasonable attorney fees. Unlike some consumer laws, CROA has no fixed per-violation amount of statutory damages. The refund-of-everything floor is what makes it powerful in debt relief cases, where fees often run to thousands of dollars.

Genuine 501(c)(3) nonprofit organizations are excluded from CROA, which is one reason nonprofit credit counseling plans are treated differently from for-profit debt settlement. The FTC and state attorneys general enforce the Act, and consumers can sue on their own. For the credit reporting side of these disputes, such as a settled account still showing a balance, see our guide to the Fair Credit Reporting Act.

The advance-fee ban has one large gap: it exempts sales completed only after a face-to-face meeting, and many state fee caps exempt the practice of law. Some debt relief programs are therefore structured as "law firms," sometimes with a local attorney or notary visit at signing, and then charge fees that a non-lawyer company selling by phone could not.

Three verified examples show how this plays out:

• StratFS. The CFPB and seven states allege that StratFS used affiliated law firms as a facade to collect at least $100 million in advance fees since 2016. A receiver now controls the company.
• Turnbull Law Group. Atlanta News First reported in March 2026 that Turnbull charges 28 percent of the original debt, while Georgia's cap for debt relief fees is 7.5 percent of the monthly payment, a cap that exempts the practice of law. Georgia's Attorney General is investigating.
• Five Lakes Law Group. The Allen complaint alleges a law-firm program promised improved credit, took large fees after a single settlement payment, and added a separate monthly legal plan charge.

A law firm label does not prove a program is legal or illegal. What decides it is how you were actually sold and charged: whether a lawyer ever met you or worked your file, whether the in-person visit was a formality, when fees came out of your account, and what you were told about your credit. Keep every document that shows who you dealt with and when.

Most large debt settlement companies charge a fee based on the debt you enroll, not on what they save you. National Debt Relief and Freedom Debt Relief each charge a settlement fee of 15 to 25 percent of enrolled debt, according to a CNBC Select comparison, so $25,000 of enrolled credit card debt can mean $3,750 to $6,250 in fees. Turnbull Law Group's reported fee is 28 percent. Small monthly account fees are added on top.

Here is how the proportional fee rule should work in practice. Say you enrolled $20,000 of debt and the total fee is 20 percent, or $4,000. If the company settles a $5,000 card, which is 25 percent of your enrolled debt, the most it can charge for that settlement is 25 percent of the total fee, or $1,000, and only after your first payment to that creditor. A $3,000 fee right after that first settlement would be a red flag.

The fee is only part of the cost. The harms consumers most often report are:

• Credit damage. Programs typically tell you to stop paying creditors and send the money to a dedicated account instead, so late payments and charge-offs can pile up on your credit report while you save.
• Creditor lawsuits. A creditor can sue you while you are saving up, and a judgment can lead to wage garnishment. If a collector sued you with bad paperwork or broke the rules while collecting, see our debt collection harassment page and the FDCPA guide.
• Dropping out. If you cannot keep up deposits, you keep owing the unsettled debts, now with added interest and late fees, and you do not get back fees already earned on settled ones.
• Taxes. The IRS treats debt canceled for less than you owed as taxable income unless an exclusion applies, such as being insolvent at the time. The creditor may send you a Form 1099-C showing the forgiven amount.

The National Advertising Division's review of National Debt Relief shows how the math can shift: the company's own claim was roughly 50 percent savings before fees but 30 percent after fees, and even that was found not to be typical.

You may have a claim worth reviewing if most of these fit:

• You paid a debt settlement or debt relief company on or after about September 2021 (CROA's 5-year window).
• Fees came out of your dedicated account before any debt was settled, or a single fee was far larger than the settled debt's share.
• You were promised a higher credit score, a debt-free date, a specific savings percentage, or protection from creditor lawsuits.
• You never received a written contract, a cancellation form, or the separate written rights disclosure.
• You were sued by a creditor, lost money when you left the program, or paid more in fees than you saved.

You likely do not have a CROA or advance-fee claim if you used a nonprofit credit counseling agency's debt management plan with small regulated fees, if the company settled debts first and charged a proportional fee only afterward, or if your only complaint is that settlements took longer than you hoped. If you already received a refund in the CFPB or New York actions against Freedom Debt Relief, that payment came from the government case, and a new private claim would need a separate violation.

Problems with the credit bureaus themselves, such as accounts that stay wrong after you dispute them, belong under the credit reporting law instead. See credit report error lawsuits and how to dispute a credit report error.

Under CROA, the starting point is simple: the greater of your actual losses or the full amount you paid the company. A court may add punitive damages, weighing how often and how deliberately the company broke the law and, in a class case, how many people were hurt. The company also pays your attorney fees if you win.

Real outcomes against debt relief companies vary a lot:

Case	Total	What consumers got
Zimmerman v. Puccio (class)	$256.5 million	Judgment equal to all fees paid
CFPB v. Freedom Debt Relief	$20 million restitution	Refunds to affected customers
New York AG v. Freedom Debt Relief	Nearly $3.6 million	Restitution to New Yorkers
Colorado AG v. Americor, Credit9	$200,000	Refunds to 262 Coloradans
CFPB and 7 states v. StratFS	At least $100 million alleged	Pending; no judgment

Two cautions. First, a judgment is not the same as money collected, and a company that is insolvent or in receivership may not be able to pay everything owed. Second, many debt relief contracts contain an arbitration clause. In CompuCredit Corp. v. Greenwood (January 10, 2012), the Supreme Court held that CROA does not override an arbitration agreement, so some people will pursue individual arbitration rather than a class case. Arbitration can still return every dollar you paid if you win.

A CROA claim must be filed within 5 years of the violation, or within 5 years of discovering a willful misrepresentation of information the company was required to disclose, whichever is later (15 U.S.C. 1679i). Because the clock runs from the violation, fees charged in late 2021 or later may still be in play even if you enrolled earlier. State law deadlines differ and can be shorter.

1. Get your paperwork. Download or request your contract, the fee schedule, and the full ledger from your dedicated account provider. Under the Telemarketing Sales Rule, you own the money in that account.
2. Match fees to settlements. For each fee, note the date and which debt it was for, then check whether that debt had been settled and paid on before the fee came out.
3. Save the promises. Screenshot ads, texts, emails, and any page that promised savings, credit score gains, or a debt-free date. Write down what phone reps told you and when.
4. Pull your credit reports and keep copies showing what happened while you were enrolled.
5. File complaints. Submit a complaint to the CFPB and your state attorney general. A complaint creates a dated record of what happened.
6. Do not sign a release. If a company offers a partial refund in exchange for signing away claims, have it reviewed first.
7. Thinking of quitting? Read how to cancel a debt settlement program so you get your account balance back within 7 business days and do not strand a settlement that is mid-payment.

Independent attorneys who handle these cases can check whether your fees were taken early, whether your program falls under CROA, and whether an arbitration clause changes the path. A free case review takes about two minutes.