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For the second time this year, Better Business Bureau (BBB) St. Louis warns consumers to use caution when responding to demand letters from various Litchfield, Illinois-based travel companies.
Since alerting consumers in March about these letters, BBB received nearly 40 additional complaints from consumers involving two Litchfield collection companies – Corporate Consulting Services and Financial Services of America. Illinois Secretary of State records show Corporate Consulting Services and Financial Services of America are operated by or related to William Bailey of Litchfield. This is the fourth consumer warning on various Litchfield-based businesses related to Bailey. BBB previously issued warnings in February 2021, August 2021, and March 2023.
Consumers from 32 states have filed more than 160 complaints in the last 36 months against Bailey-related travel businesses, including Castaways Vacation Club, Funseekers Inc., Sealand Travel Club, Island Trader Vacations, Tradewinds Vacations, Coconut Club Vacations, Funtasia Vacations, Matrix Travel Network, Payless Vacations, Phoenix Vacations, The Travel Company, Voyager Vacation Club, Royal Palms Travel Inc., Travel Services Inc., and All Inclusive Excursions. All businesses share the same address – a P.O. Box in Litchfield. These travel businesses have an “F” rating, the lowest on BBB’s scale. Corporate Consulting Services and Financial Services of America have no rating.
Letters consumers shared with BBB show the collection companies share the same address of 415 N. State Street in Litchfield, and their phone numbers are nearly identical.
Consumers tell BBB they believe they canceled their membership years ago only to receive notice that their account is delinquent. Letters sent to consumers by Corporate Consulting Services inform the recipient that their account is “in serious arrears.”
Some consumers reported getting letters from both Corporate Consulting Services and then another from Financial Services of America. Those letters threaten the recipient with being reported to the Internal Revenue Service (IRS) should they not settle the debt.
“If you choose not to accept this settlement, we will have no other choice but to report this debt as taxable to the IRS,” the letter reads.
A woman from Edgewater, Florida, told BBB she believed that she had long ago canceled a membership with Castaways Vacation Club only to receive a demand letter from Financial Services of America.
“They haven’t provided any service to us,” the woman told BBB. “We haven’t heard from them in years. They have been harassing us by phone and with these letters.”
The woman said she was concerned with the threat to report her to the IRS.
“They are trying to scare elderly people,” the woman told BBB.
A man from North Port, Florida, filed a complaint after receiving what he said was a threatening letter from Financial Services of America. He said he was concerned that the company would turn him in to the IRS if he didn’t pay them.
“It seems like they are phishing for money,” the man told BBB. “I’m not paying them anything.”
A woman from South Charleston, West Virginia, told BBB she once purchased a vacation club membership in 2009 but canceled it after a year. She said she received demand letters from Corporate Consulting Services and Financial Services of America.
“We do not owe them any money and have not had a membership or any dealings with them in over a decade,” the woman wrote in her complaint. “The idea that after over a decade they are collecting a debt ‘hundreds of dollars in arrears’ is preposterous.”
A Rockwall, Texas, woman told BBB she was once a member of Castaways Travel Club but had canceled the membership 12 years ago. She said she had no contact with the company for years before receiving a demand letter from Corporate Consulting Services. In its response, the company said it had tried to contact her through mail, phone and email, including weekly newsletters.”
“I’ve had the same email address for years, and I couldn’t find any communication with them,” the woman told BBB.
BBB consulted with the IRS (Internal Revenue Service) on claims made by Financial Services of America in its demand letter. The IRS said the business is correct when it claims that forgiven debt is reportable to the IRS and can count as income. However, the IRS said the business cannot determine what is taxable as the taxpayer’s situation determines whether it is taxable income.
“We urge consumers who receive letters from Corporate Consulting Services or Financial Services of America to investigate claims made in the letter before responding. If you don’t owe it, don’t pay it,” said Michelle L. Corey, BBB St. Louis president and CEO. “Make sure the company is following the regulations under the Fair Debt Collection Practices Act.”
BBB suggests that if consumers notice that the alleged debt they do not feel they owe has been reported to the IRS, commonly known as a Form 1099-C, they consider consulting their tax adviser or the IRS as to the appropriate way to handle it.
The business previously requested the BBB not to contact them by phone. Neither Corporate Consulting Group nor Financial Services of America responded to a BBB letter regarding how it plans to address its ongoing serious pattern of customer complaints.
Consumer complaints registered at BBB and brought to the businesses' attention received the following response from the businesses:
“Member has received yearly billings re-billings, calls, emails along with weekly newsletters with current specials and offers,” the company’s typical response to a complaint reads. “We have made multiple attempts to contact the member to help them bring their account up to date to utilize the services they purchased, bring it up to date to sell/transfer as their contract states, as long as the account is current and we approve the transfer or to close the account through a Mutual Release.”
BBB offers tips on safe vacation planning:
- Research any business and its owners carefully before paying any money. Check the company’s BBB Business Profile at BBB.org or by calling 888-996-3887.
- When searching for travel deals on the Internet, avoid using broad search terms. Using broad search terms can sometimes lead you to websites that look official but are designed to trick users.
- If you attend a meeting where vacation club plans are sold, do not give in to high-pressure sales tactics. Take your time to decide and research what you are purchasing.
- Make sure you get all the details in writing. If you purchase a travel club membership and have second thoughts about the deal, you have a limited time to rescind the contract and get your money back. Refer to the Federal Trade Commission’s Cooling-Off Rule for more information.
- Pay by credit card whenever possible to challenge the payment.
- If you have a complaint, file it at BBB.org and with your state’s attorney general’s office.
- For more information about travel scams, refer to a 2023 BBB study.
