For years, I've cringed when I hear those offers to "Wipe out your debt" or "Repair your credit."

Now, New York Attorney General Andrew Cuomo has launched a nationwide investigation of the debt settlement industry.

It's about time. I don't know why people have insisted that the way to fix their debt problems is to pay someone to fix them. But they do.

"In the end, most consumers who turn to debt settlement firms for help wind up worse off than before -- with higher debts and lower credit scores than when they first asked for help," Susan C. Keating, president of the National Foundation for Credit Counseling, said in a recent statement.

I've heard the stories. The consumer stops paying his debt on the advice of the debt settlement company. The fees start piling up. The creditor sues the consumer. Even if the debt eventually is reduced, the fees for getting this done were high, debt forgiveness can trigger additional federal income tax, and the experience was very rough.

Cuomo announced he's looking into the business practices of 14 firms and one law firm.

He issued subpoenas to:
American Debt Foundation, Inc.; American Financial Service; Consumer Debt Solutions; Credit Answers, LLC; Debt Remedy Solutions, LLC; Debt Settlement America; Debt Settlement USA; Debtmerica Relief; DMB Financial, LLC; Freedom Debt Relief; New Era Debt Solutions; New Horizons Debt Relief Inc.; Preferred Financial Services, Inc.; U.S. Financial Management Inc. (also knowns as My Debt Negotiation) and the Allegro Law Firm.

According to a news release from his office, the subpoenas are for information about the companies’ fee structures, how many people have benefitted from the companies’ services and what kind of relief the companies are actually providing.

Cuomo's office also said it is also investigating Nationwide Asset Services, Inc.and Credit Solutions of America.

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Are you hearing the industry's reasons for not wanting any more limits imposed on credit cards?

Here's from TheStreet.com:
"I think people are recognizing that the dilemma of credit card companies is that if they don't charge a certain rate, they'll go out of business," said Jim Cramer on Thursday's "Stop Trading!" segment on CNBC.

What, they can't make money unless they have things as they are? The prime interest rate is 3.25 percent but the average variable-rate credit card is charging 10.78 percent. That's not enough room for a little profit? And who, frankly, is paying that average rate? A lot of people are paying more, much much more.

The veiled threat from the industry: Rein us in and we'll cut your credit.

I have a few choice responses to that. What's yours?

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If this is not the time for credit card reform, then when?
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That's the question Kathleen Day of the Center for Responsible Lending asks in this very intelligent article from CNNMoney. It's an update on the efforts in Congress to write some rules for credit card companies that are also reasonable for borrowers. Right now, the deck is stacked against consumers.

If you'd like to know how this is faring on Capitol Hill, you should read this: http://money.cnn.com/2009/04/07/news/economy/credit_card_protections/index.htm?postversion=2009040713

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My friend Pamela Yip at the Dallas Morning News wrote a great story about how to negotiate a lower interest rate for your credit cards. Like her readers, I've always found that they just won't lower rates, no matter what. But she's put together some good ideas on how to make it through their system and get yourself a break. To have a look, click on this link:

http://www.dallasnews.com/sharedcontent/dws/bus/columnists/pyip/stories/DN-moneytalk_19bus.ART.State.Edition1.4eaee3a.html

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If you saw me on television last week -- watch the video at www.sun-sentinel.com/helpteam -- you know I was encouraging you to write to the Federal Reserve and tell them what you think of their plans to reign in credit card companies and bank overdraft charges The rules they propose are good. Not strong enough in my view. But they will help consumers somewhat.

Ohio's state Treasurer Richard Cordray is doing the same thing. He hopes to get thousands of people in his state to write about their credit-card horror stories.

Some of the things the new regulations would do:
-Force credit card companies to give you a reasonable amount of time to pay, after the bill arrives.
-End the practice of hiking rates on your balance. In essence, you buy something knowing you'll pay a certain rate only to learn months later that your rate went up.

You can read more about it at www.creditbloggers.com.

To view the proposed rules, go to:
http://www.federalreserve.gov/generalinfo/foia/proposedregs.cfm.
Look for Regulation AA - Unfair or Deceptive Acts or Practices [R-1314])

If you want to comment, here's how:

Send an e-mail to regs.comments@federalreserve.gov. Include Docket No. R-1314 in the subject line.
or,
Send a letter to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Ave, NW, Washington DC 20551. Identify your comment by including Docket No. R-1314 on the top of your letter.
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Wednesday night I'll be doing a commentary on the Nightly Business Report on PBS.

I'll be talking about overdraft charges and credit card rules, some very anti-consumer practices that I dislike.

This summer, you have a chance to have a voice in changing the way these things work. The Federal Reserve -- along with the Office of Thrift Supervision and the National Credit Union Administration -- have proposed some rules. Find out how you can have an impact.

Catch the Money File on the Nightly Business Report at 7 p.m. on WPBT Channel 2 Wednesday June 18.

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