It may not have been fitted properly. The directions do indicate the potential for rubbing if not fitted correctly or if you are using it to run with the dog. Perhaps it just was not suited for your breed of dog.
The leash hole is in the front to initiate the dog turning toward you when s/he pulls. It is specifically designed that way. But, I do have to say that if you do not hold the leash higher, it sometimes tangles in the dogs legs.