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WASHINGTON (AP) — The government is cracking down on companies that advertise help for troubled homeowners but often turn out to be scam artists.

The Federal Trade Commission said Thursday it would propose to ban those foreclosure rescue services from collecting payment up front. Instead, they could only collect money if they were successful in providing help.

Government officials say unscrupulous companies often charge upfront fees as high as $3,000 for help with loan modifications that rarely pay off. The government says it has filed charges against 28 companies, which often imitate government housing assistance programs.

"Homeowners facing foreclosure or struggling to make mortgage payments shouldn't have to contend with fraudulent companies that don't provide what they promise," FTC Chairman Jon Leibowitz said.

The new rules were required by legislation passed by Congress last year. Consumer advocates and government officials say borrowers are better off working with nonprofit credit counselors who work with lenders at no charge.
   
Copyright 2010 The Associated Press.