U.S. regulators announced settlements Wednesday with three debt-counseling agencies that they said had bilked consumers out of more than $100 million, a scam they said was becoming increasingly common.

The three companies promised to help consumers manage their debts but in fact only made their problems worse, the Federal Trade Commission (search) said.

Clients of the National Consumer Council (search), Debt Management Foundation Services Inc. (search) and Better Budget Financial Services Inc. (search) paid thousands of dollars to keep bill collectors at bay, but instead saw their debts, interest rates and late fees increase a.

"All three companies lied about who they were, what they could do for consumers and how much they charged," Parnes said at a news conference.

The companies agreed to give back a total of more than $25 million to consumers, and two are in the process of being shut down. None of the owners face jail time as the FTC does not have criminal authority.

Attorneys for the three companies were not immediately available for comment.

A new bill expected to pass Congress requires consumers to seek counseling before they declare bankruptcy.

Nonprofit credit-counseling operations help consumers consolidate their debts and negotiate lower interest rates, usually for a nominal fee.

While many credit-counseling agencies are legitimate, scam operations are becoming more common in the field, Parnes said.

Better Budget Financial Services, based in Massachusetts, advised consumers to stop paying their monthly bills and pay the company instead while it negotiated with creditors, the FTC charged. But most saw late fees and penalties add up as their bills went unpaid, forcing some to declare bankruptcy.

The company agreed to return $1.3 million to consumers, and its owners must post a $2 million bond before entering the business again.

National Consumer Council, of California, used its nonprofit status to exploit a loophole in telemarketing laws and place thousands of unsolicited sales calls to consumers, the FTC said.

The company promised free debt counseling, but it simply directed consumers to other companies that charged thousands of dollars in fees but rarely helped consumers reduce their bills, the FTC said.

The company is winding down its business and has returned approximately $24 million of the $84 million it took from consumers, the FTC said. Three company officers also have personally paid back a total of $3.9 million to consumers.

Debt Management Foundation Services, of Florida, also violated telemarketing laws to drum up business and charged consumers fees of up to $1,000, the FTC said. The company is in the process of being liquidated, and its owners must pay back a total of $250,000 and surrender their interest in the company.

The FTC last week announced a settlement that will require a Maryland debt-counseling firm, AmeriDebt Inc. (search) , to shut down entirely.

Debt-ridden consumers should avoid credit counselors that insist on high monthly fees and guarantee to get rid of debts, the FTC said. Further information is available at the commission's Web site at (http://www.ftc.gov).