Attorneys general in 40 states just asked the FTC to step up the fight against debt relief companies that mislead and overcharge consumers, like Credit Solutions of America (CSA), reports Consumer Affairs.

Why are so many states going after debt relief companies? Because they insert themselves between consumers and creditors and suck up the money earmarked for creditors by promising that they’re going to renegotiate payments—and then they don’t keep that promise.

According to a lawsuit by the Illinois Attorney General, Credit Solutions of America does just that; it “continually fails to negotiate with consumers’ creditors even though consumers cease to pay their creditors directly and, instead, make months of upfront payments to CSA.”

So now the AGs are asking the FTC to tighten telemarketing rules, like prohibiting them from collecting fees before rendering services.

“In an ever-building wave of ploys and scams on consumers, debt settlement and debt negotiation companies promise to help consumers eliminate or reduce their debts, but often fail to deliver on these promises,” said Ohio Attorney General Richard Cordray. “Tougher regulations will help to rein in some of the most deceptive and unfair practices in this industry.”

“States Want Coordinated Crackdown On Debt Relief Firms” [Consumer Affairs]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.