NEW YORK (CNN/Money) – Debt-swamped consumers who want to consolidate their debt, or repair their credit, should be on guard when shopping for credit counseling programs, federal and state agencies said Tuesday.

The Internal Revenue Service, the Federal Trade Commission, and state agencies issued a statement noting that there has been an increasing number of complaints about credit counseling programs, which they believe indicates that some organizations are "engaging in questionable activities."

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What's more, the agencies said they are investigating whether some credit counseling organizations "may seek tax-exempt status in order to circumvent state and federal consumer protection laws."

Typically, a credit counseling agency is organized as a nonprofit organization. That does not mean, however, they are either low-cost or trustworthy. Nonprofits are not limited in what they can charge clients or in what they pay their staff.

"It is not fair to taxpayers struggling with financial problems to be taken advantage of by credit counseling groups exploiting gaps in the law," said IRS Commissioner Mark W. Everson in the statement.

RELATED ARTICLES • What to know before signing up with a credit counseling agency.

At their best, credit counseling programs – which deal primarily with credit card debt, not secured debt like home loans -- can arrange for a reduction in credit card interest rates, an elimination of finance charges, lower monthly payments, relief from collection agents, and one-stop bill paying.

But they will charge you for the service.

Travis Plunkett, of Consumer Federation of America, points out the red flags of credit counseling services. Play video (Real or Windows Media)

The Consumer Federation of America recommends you avoid agencies that charge more than $50 to set up an account and more than $25 in monthly maintenance fees, CFA legislative director Travis Plunkett told CNNfn's "The Flipside" Tuesday. (See video.)

And don't assume that just because you have credit card debt you're a good candidate to be in a repayment program, Plunkett said. The best candidate is a person with credit card debt, a steady income, and a serious chance of paying down all that is owed within three-to-five years.

Consumers with a light debt load may just need budgeting advice and can pay down their debt on their own. So beware credit counselors who automatically want to enroll you in a debt repayment plan without taking very much time, if any, to review your total financial and credit picture, he cautioned.

Following are just a few of the ways you can protect yourself against disreputable agencies:

Beware high fees or required "voluntary" contributions. Combined with monthly service charges, they may add to your debt load.

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Check with your creditors and make sure they are willing to work with the agency you choose. If they do, check up with them regularly to make sure your debt is actually being paid off.

Research two to three credit counseling programs before picking one. Check with the Better Business Bureau and state agencies about whether a program has a history of unresolved consumer complaints.

(Click here for ways to spot telltale red flags of deceptive credit counseling programs.)