Millions of Americans are struggling with growing debt after the economic downturn.  Many feel desperate fro help.  But Postal Inspectors are warning you to be leery of debt settlement groups after some consumers who did business with them, found themselves further in the red.

“Basically, this company was saying, 'Okay, you have all this debt and we can settle it for approximately 45% of the debt,'” said Robert Clark, US Postal Inspector.

That is the pitch some debt settlement firms are making to consumers.

“They tell the customers stop making the monthly payments to the creditors, stop speaking to the creditors as long as you can make one monthly payment to us,” he added.

Customers are asked to sign a three-year contract, and if they do, all of their debt will be paid off.  The catch: hidden fees and charges.

“Some of the victims that we’ve spoken to admitted I didn’t even ask what the fees were because they were so happy to stop paying all the credit cards and pay one monthly fee that was affordable,” said Clark.

Relief quickly turned to anger when consumers realized the money they were paying had not been sent to creditors.

“A lot of the victims called once they realized there was no money in their escrow accounts. The company would then point to the stipulation in the contract that says they’re allowed to collect these fees.” explained Clark.

Postal Inspectors says in one case there were more than 1,300 victims and $3 million in dispute.  Customers had nowhere to turn.

“A lot of these creditors filed lawsuits against these people. A lot of these people had to go to court They were sued and had judgments against them and a lot of them had to file for bankruptcy,” said Clark.

Inspectors say make sure you read a contract thoroughly before you sign anything.  If you don't, you could end up being a victim.