“This company was run by people who lied, bullied, and preyed on vulnerable Americans struggling to resolve their financial situation,” Cuomo said. “Pretending to be a police officer, threatening to throw consumers in jail — these practices are despicable as they are illegal.”

Operating under the name Final Claims Asset Locators, among several other names, the debt collection agency had its collectors pose as law enforcement officials who told debtors they were being arrested.

In a recorded conversation, a debt collector even told a debtor, “Make sure you have somewhere for your kids to go. Lock up your house. Get some clean clothes, because you’re not coming home anytime soon.”

The debt collection agency was owned by a former drug dealer and convicted felon Tobias Boyland, who also went by the name “Bags of Money” and who served 13 years for armed robbery. Boyland was arrested this week on a weapons charge after authorities found him carrying a loaded, unlicensed pistol and after finding an AK-47 rifle and $34,000 in cash in his house.

Boyland also owns a modeling agency, has released a rap album, has written a self-help book called “Thug Motivation,” and has advertised his business on a billboard using an image of himself in a gladiator outfit.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

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The Federal Reserve, the Obama administration, and Congress were all commended by IMF, the Washington-based lender that has helped rescue the economies of Pakistan and Iceland, for their efforts to salvage the economy with a “well-targeted” stimulus package.

In fact, the report showed that the stimulus package will raise the gross domestic product, the value of goods and services produced in the United States, by 1 percent this year and by 0.25 percent in 2010, pointing to the likelihood of a “gradual” recovery.

Despite the IMF predicting a solid upturn in the economy in the next year, it still sees the U.S. unemployment rate topping 10 percent next year and sees a successful exit plan from the financial rescue programs as essential to the country’s recovery.

“The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010,” the staff review of the IMF report stated.

The IMF projects that public debt will nearly double from 2009 to 2011 to 75 percent of the gross domestic product, putting significant pressure on the Treasury bond rates, which are currently low, making it easier for prospective homebuyers to get low mortgage rates.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

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The section of the U.S. bankruptcy code in question was ruled to be in violation of the First Amendment by the U.S. appeals court in St. Louis in 2007 because the law “prevented lawyers from fulfilling their duty to clients to give them appropriate and beneficial financial advice.”

The court ruled that the law was passed as an attempt by Congress to stem lawyers’ abuse of the bankruptcy system but that language was too broad.

In fact, the court said, some clients might even benefit from their lawyers’ freedom to advise taking on certain types of debt, including a mortgage refinance, which can free up funds to help a consumer pay off other debt before filing for bankruptcy.

The language “would include advice constituting prudent pre-bankruptcy planning that is not an attempt to circumvent, abuse, or undermine the bankruptcy laws,” the court wrote (“U.S. Top Court to Decide Bankruptcy Advice Case,” Reuters, June 8, 2009).

In the Supreme Court case, which will be heard in October, the Obama administration is expected to argue that this provision of the Act can be viewed narrowly enough to allow debt relief agencies to advise their clients in anyway they see fit.

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Credit Solutions of America, based in Richardson, Texas, advertised that it could cut consumers’ credit card payments in half, reduce their other monthly bills, and get them out of debt within three years, Koster says. But although the company collected hefty fees from consumers with the promise of delivering those debt reduction results, Koster charges that Credit Solutions of America never provided the advertised debt relief services, leaving its customers in a worse financial situation than before.

According to the Attorney General, Credit Solutions of America charged its customers fees that amounted to about 15 percent of their total debt, collecting those fees through an initial upfront payment and then through subsequent installment payments that it took directly from customers’ bank accounts.

The state of Missouri prohibits companies from collecting fees for credit services prior to the services being performed in full. Moreover, says Koster, the company wasn’t even legally registered to do business in the state.

“Credit Solutions of America promised real relief to consumers who were in financial straits because of high credit card debt,” Koster said. “We will continue to aggressively pursue the unacceptable business practices of these companies that offer false promises and deliver only harm.”

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The Federal Reserve reported last week that revolving credit — which is made up almost entirely of consumer credit card debt — fell by $8.6 billion in April, an annualized rate of 11 percent (“Fed: Credit Card, All Consumer Spending Declines,” CreditCards.com, June 5, 2009).

This is the seventh straight month of declines in revolving credit since October 2008 and the longest pullback in revolving credit balances on record since the Federal Reserve began reporting on consumer credit in 1968.

“The trend is certainly toward having less revolving consumer credit outstanding,” said Cynthia Ullrich, senior director at Fitch Ratings in New York.

Overall consumer debt, which also includes nonrevolving debt like auto loans and student loans,, dropped by a total of $15.7 billion in April, for an annualized rate of 7.4 percent — the second largest contraction in consumer debt in history (“Consumer Debt Plunges by $15.7 Billion in April,” MarketWatch, June 5, 2009).

Consumer debt has decreased by $43 billion in just the last three months, after jumping by $131 billion in 2007.

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CSA is accused of defrauding 18,000 New York customers out of about $17 million in fees over a five-year period from January 2003 to September 2008.

Through marketing and advertising campaigns CSA promised to reduce customers’ debt by 60 percent, but Cuomo’s office found that only an average of 1 percent of CSA customers actually saw these results.

CSA, the self-proclaimed largest debt settlement firm in the country, instructed its customers to make monthly contributions to a savings account instead of making their debt payments and to ignore calls from creditors, which often drove customers further into debt and failed to result in a successful resolution. The New York Times reports that the debt settlement firm even suggested that its customers sell their blood plasma, mow lawns, and borrow from their neighbors to drum up funds for their savings account (“2 Firms Accused of Fraud in Debt Settlement,” May 19, 2009).

Lawyers representing CSA said the debt settlement company “disputes liability over the complaints and supposed practices” because the alleged fraud occurred during a 12-month period when the company was under different ownership. The company has also faced litigation in South Carolina, Idaho, and Texas.

Cuomo has also charged Nationwide Asset Services with falsely advertising that it could reduce customers’ debt by 25 to 40 percent. But of the 18,000 New York customers it enrolled between January 2005 and May 2008, Nationwide settled the debts of less than 2,000 of these customers.

“Today’s lawsuits send a clear message that we are prepared to rein in this unregulated industry and protect New Yorkers who are proactively trying to work their way out of debt,” Cuomo said in a statement released by his office (“Attorney General Cuomo Sues Debt Settlement Companies for Deceiving and Harming Consumers,” May 19, 2009).

Cuomo’s two lawsuits are part of a larger probe of the debt settlement industry announced earlier this month in which he subpoenaed 17 debt settlement companies in addition to Nationwide and CSA.

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You’d be surprised at how much extra money you can keep in your account just by doing an audit of all your monthly expenses and making a few simple adjustments. Here are 10 tips to help you start saving more today in all areas of your life.

1. Ditch the paid checking.

Look for a bank that offers free checking with no minimum balance. You could save as much as $100 a year in fees if you’re currently paying for your checking account.

2. Don’t leave for the grocery store without coupons and a shopping list.

Avoid impulse shopping. Sticking to a list of must-haves and going in armed with coupons for the items on your list could cut your grocery bill in half. Check weekly newspaper ads, and sign up for alerts on Internet coupon sites to get notified of upcoming deals. Pay close attention to the price-per-ounce (or other unit) when comparison shopping: A similarly priced item may actually be much more expensive than you think because it’s smaller and you’re getting less for your money.

3. Resist the convenience of the convenience store.

It’s easy to pick up a gallon of milk, a loaf of bread, or that roll of paper towels you need when you stop to fill up at the gas station, but you’re paying for the convenience of that one-stop shopping: These stores often charge some of the highest prices for food and groceries. Avoid paying 50-percent markups. Find time to make your shopping runs, and get your groceries at the grocery store.

4. Audit your electricity use.

Ask your electric or gas company to check out your utility usage, or do it yourself. Depending on when your usage is heaviest, signing up for an off-hour rate program or a load management program could help you save hundreds of dollars a year on your electric bills.

5. Pore over your phone bills.

Take a fine-tooth comb to your cell and home phone bills to see if you’re paying for minutes and services you don’t need. Make adjustments so you can take advantage of plans that give you the best rate for times when you tend to use the most minutes. Consider getting rid of your landline altogether: Most cell phone providers offer monthly packages with lots of minutes and free roaming and long distance for less than what you’re paying to maintain both a cell phone and a landline.

6. Keep your car in shape.

A regular engine tune-up and something as simple as making sure your tires are properly inflated can help you save around $100 a year on gas.

7. Insist on fixed bids for repair services.

Only hire people and companies for home repairs who offer fixed-price bids for work. Home repair servicers often draw complaints, many times for trying to charge more than they initially quoted once they’re midway through the repairs.

8. Cut back on car insurance coverage.

To save money on your monthly premiums, unless you’re on the road a lot, consider raising the deductible on your collision and comprehensive coverage to at least $500 or, if you have an older car, getting rid of collision completely.

9. Get new homeowner’s and renter’s insurance quotes.

Call around or get quotes online from sites like Esurance and 2Insure4Less.com. You could find a lower rate with a new provider or use competitors’ lower quotes to negotiate a better rate with your current insurer. Check your state insurance department to make sure you aren’t paying more for insurance than typical rates in your area.

10. Shop around for the best prices on your prescriptions.

You may end up having to get different medications at different locations, but the savings can be huge. Consider trying mail-order pharmacies, and, if possible, always opt for generic versions of your prescriptions.

For even more money-saving ideas, check out the Federal Citizen Information Center’s 66 Ways to Save Money.

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The defeated measure would have allowed bankruptcy court judges to modify the mortgage terms of a bankruptcy filer’s primary residence with the possibility of having the filer’s interest rate or principal balance lowered in a process known as a “cramdown.” Currently bankruptcy judges can only modify mortgages for second homes or investment properties.

While opponents of the bill, including the nation’s biggest banks and Republicans in the Senate, argue that the bankruptcy modification provision would increase lending costs for future homebuyers and, therefore, destabilize the housing market even further, supporters of the cramdown measure contend that it would help more than 1.7 million struggling homeowners to stay in their homes.

In spite of the defeat, the measure’s sponsor, Senator Dick Durbin, D–Ill., is determined to keep pushing for cramdown legislation that he says is needed. In the time since he’s been campaigning for bankruptcy code reform, Durbin says home foreclosures have jumped from 2 million to 8 million.

“I’ll be back. I’m not going to quit on this,” Durbin said. “At some point, the Senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate.”

The measure is part of a larger Senate housing bill that includes a provision to revamp the Hope for Homeowners program and a proposal to temporarily increase the deposits guaranteed by the Federal Deposit Insurance Corporation, and which still has to be reconciled with the House’s version of the bill. House Democrats will most likely remove the cramdown measure from the bill to help get it passed by both houses of Congress.

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In this recession, costly expenses like medical bills are taking a backseat to daily expenses like water, electricity, food, car, and mortgage payments. Now, as with credit cards, consumers are struggling to keep up with their medical bills and increasingly letting more and more of their bills go unpaid.

The Commonwealth Fund, a healthcare research foundation, reports that in 2007, 41 percent of adults were struggling to pay their healthcare bills, up from 34 percent in 2005 (“When Medical Bills Outpace Your Means, Seize Control Swiftly,” The New York Times, April 25, 2009). And it’s not just the uninsured who have fallen behind on their payments, nearly two-thirds of people with medical debt actually have health insurance.

Experts say, however, that there are ways to manage your medical debt even if you aren’t capable of paying it off right away.

1. Communicate with your creditor.

If you know you’re going to be late on one or more of your medical bills, let your creditors know. Just talking with them won’t obligate you to make a payment, but if your creditor is aware that you’re trying to stay on top of your debt you may be able to avoid collections, at least temporarily, and protect your credit.

2. Review your bills.

Keep a running tab of your doctor visits and medical procedures to accurately review your bills when they come in. Errors in medical billing can occur often, so if you find a discrepancy call your provider for an explanation. And remember that it can never hurt to resubmit bills to your insurer if you’ve been denied coverage.

3. Bring in extra help.

Try negotiating with your provider for a discount or for some leeway on repayment. If your creditor still won’t work with you, consider hiring a billing specialist who may be able to help you find errors in your medical bills and better understand the often-complex language of medical billing.

4. Avoid the plastic.

Don’t react with panic when you receive a late-payment notice by transferring your medical bill debt onto your credit card. Chances are if you can’t pay your medical bill now, you’re not going to be able to pay the credit card bill when it comes in later. And medical bill charges that stay on your credit card will immediately start earning interest, not to mention that charging a large sum to your credit card could negatively affect your credit score, if you’re carrying too high a debt load.

5. Know your rights.

Just because a medical bill goes to collections, doesn’t mean creditors have free rein to hassle you into paying; they have guidelines and rules to abide by — they can only call between 8 a.m. and 9 p.m. and they can’t scare you into paying the debt. Ask for the caller’s name and request that they send you the name of the creditor and the amount you owe in writing. Visit the Privacy Rights Clearinghouse for a guide to debt collection.

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“This Attorney General’s office will have zero tolerance for any mortgage broker or refinancing lender that uses deception to lure consumers into doing business with them,” Koster said. “The Attorney General’s office will use all its powers to investigate and prosecute businesses that use deception and fraud in advertisements to Missouri consumers.”

Under the new campaign, Koster has already sued two businesses, Goldstar Home Mortgage and Oxford Lending Group, for sending misleading direct mail advertisements to consumers that encouraged homeowners to refinance their home loans.

Goldstar’s mail piece included the name of the homeowner’s bank at the top of the letter, which Koster argues made the homeowner’s own bank appear that it was encouraging homeowners to refinance with Goldstar. The company also marketed loans that were “inappropriate” for homeowners — loans that, in at least one case, would have left the homeowner with a mortgage worth more than the home itself.

Oxford Lending’s direct mail pieces stated that homeowners had a special opportunity to refinance under the “Economic Stimulus Act of 2008.” Oxford also used the U.S. Department of Housing and Urban Development’s label and name to suggest that the letter was coming from the government and not Oxford.

Koster warned Missouri homeowners to be cautious of any mail having to do with mortgage refinancing, loan consolidation, mortgage modification, and foreclosure relief. With interest rates at historic lows and foreclosures at record highs, Koster says homeowners, seniors in particular, who looking to save their homes are particularly vulnerable to these mortgage scams.

“Increasingly, mortgage brokers are using deceptive ploys to draw Missourians back into the refinancing game,” Koster warned. “Our goal is to alert consumers that these scams are out there and to sue every mortgage broker who crosses the line.”

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