New York Attorney General Andrew Cuomo is leapfrogging over Washington in the race to lead public outrage against credit-card abuses.
Cuomo yesterday scored his gains with a crackdown on two major outfits he accused of tricking and gouging consumers with debt-settlement schemes that caused more grief than relief for cash-strapped debtors.
According to Cuomo, one firm, Credit Solutions of America, charged exorbitant fees for advising consumers to mow lawns, give up part of their car insurance, borrow from their neighbors and church, as well as sell their blood plasma to raise cash for credit-card collectors.
Some 18,000 New Yorkers signed up for the service over the past five years, but just 2,000 got what they paid for, the attorney general charged.
It was Cuomo’s latest expansion of his ongoing national probe of financial abuses, and came just as President Barack Obama and Congress began putting finishing touches on a sweeping credit-card reform effort.
Legal experts said the feds might push back at being upstaged by a state attorney general using an arcane local law, the Martin Act, claiming to have power over Uncle Sam.
“Washington is taking command and control in this issue, and it’s going to be interesting to see if they’re going to be happy taking a secondary role to Mr. Cuomo,” said veteran attorney and prosecutor Bill Singer.
Cuomo said many “shady” debt settlement companies have been preying on consumers across the US without doing much except for “wrecking their credit.”
The two accused firms — CSA-Credit Solutions of America Inc. of Richardson, Texas, and Nationwide Asset Services Inc. of Phoenix — denied any wrongdoing.
Cuomo said the companies promised to help slash credit-card debt as much as 60 percent, but in reality only a small fraction of that was ever cut. paul.tharp@nypost.com