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After replying to the message, Pickett, a 24-year-old night manager for a Northern California hotel, says he charged nearly $3,000 to Financial Solutions, a company that told him to stop paying the credit card bills and demand formal proof of the debt.The advice came from a firm that a federal indictment in Florida alleges was part of a scheme involving income tax conspiracy, tax evasion and wire fraud, a USA TODAY review shows.Today, Pickett says the debt has grown to roughly $25,000, and the credit card firms have written off the total, further blotching his credit record.

Financial Solutions had told him that outcome was unlikely, he says.If the indictment is true, obviously, I’ve been victimized  they lied to me, Pickett says.Amid signs of a steep recession, an Internet-based industry of self-described debt-counseling firms is offering consumers ways to eliminate or reduce credit card bills and repair credit records.

But prosecutors, government officials and consumer advocates say some of the programs seem too good to be true  and are.Usually, the first form of advice some of these companies offer is to stop paying your debt, which is, quite frankly, the absolutely worst thing you can do, says Stephen Cox, spokesman for the Council of Better Business Bureaus, calling such a recommendation one of the red flags.Although there are no definitive national statistics on debt-related scams, reports from federal and state agencies indicate the problem seems to be rising.The Council of Better Business Bureaus logged 892 complaints across North america about all types of credit and debt-counseling issues from January to June.

American consumers filed 3,092 complaints about debt management or credit counseling in 2007, Federal Trade Commission records show.In October, the FTC and agencies in 22 states announced a legal crackdown targeting 33 operations that allegedly claimed the ability to remove negative information from consumers’ credit reports, even if that information was accurate.In Florida alone, Attorney General Bill McCollum reported his office had received more than 1,400 debt-related complaints as of Oct.

Last month, he announced a $240,000 restitution settlement involving New Leaf Associates, a firm that allegedly victimized more than 2,000 consumers who paid thousands of dollars each for non-existent debt services.The alleged scheme in some ways resembled the program Pickett signed up for last January.

He says he hoped the $2,995 program  described as an education package in a Financial Solutions audio summary  would help eliminate charges he’d run up on two credit cards to pay medical bills for his ex-wife.Following Financial Solutions’ instructions, Pickett says he stopped paying his credit card bills and sent form letters that challenged the debt and sought verification of the amount owed.One of the credit card firms eventually responded with a letter that said the program he was using was fraudulent.

Financial Solutions advised him to ignore the letter, he says.

Pickett says he followed Financial Solutions’ instruction to respond with a letter stating that he was contesting the charges and seeking proof of any debt.Shortly afterward, Pickett said he checked his credit report and discovered the credit card companies had charged off the debt  written it off as unpaid.

Pickett says it also prompted a cut in his overall credit limit.Realizing the outcome could have been the same even without Financial Solutions, Pickett says he complained.

A company representative offered him a credit repair program for a discounted fee of $850, he says.I don’t know what’s going to happen to my credit at this point, says Pickett, who declined the new offer.According to the Florida criminal indictment, Financial Solutions is a self-described asset protection, debt elimination and education business run by Arthur Merino, 36, of Seattle.

Internet registrations show Merino was the administrative contact for at least one of the Financial Solutions websites used by Pickett, USA TODAY found.The (debt-elimination) programs did not work, the indictment charges.

They were part of a scheme that sold memberships for $1,350 to $18,750 to participants who were offered DVDs, seminars and other information about debt elimination, anti-tax theories and offshore financial transactions, the indictment charged.Despite the experience, Pickett remains unperturbed.

He said he believes his credit hasn’t been completely ruined because he’s making timely car loan payments and is current on two other credit cards.As for the possibility he could still face lawsuits about the charged-off debt, he offers a fail-safe response: Hey, that’s what bankruptcy (court) is for.But Cox, the Council of Better Business Bureaus official, urges anyone facing similar problems to contact a reputable non-profit credit counselor.It is incumbent upon the consumer to do their homework and check out any agency with whom they’re considering doing business, agrees Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling,.