[an error occurred while processing this directive]

I-Team: Company facing allegations of misleading businesses, nonprofits

Updated: Wednesday, November 27, 2013 |
I-Team: Company facing allegations of misleading businesses, nonprofits story image
LANSING, Mich. (NEWSCHANNEL 3) - An I-Team investigation finds a company based in Michigan is attracting national attention, but not the attention that most companies would want.

Victims say Corporate Records Service is misleading small businesses and nonprofits asking for money for a service that state regulators say may not be necessary.

34 states have put out warnings about the company.

We found Corporate Records Service does not make it easy to find its offices or talk to company management.

The I-Team's adventure to track down the company and the man listed with the Better Business Bureau as its Co-Owner Steve Fata took us across Lansing and to a lot of different addresses.

Kalamazoo non-profit Director Demarra Gardner  received one of their letters.

"It's just sickening to think people are out there finding any way that they can scam on individuals and organizations," says Garnder.

Gardner feels fortunate that as she was about to pay she had second thoughts and never sent money.

But other businesses and non-profits across the country getting the letters have not been so lucky.
 
The letters look official according to recipients who say they thought they were from a government agency. 

They ask for $125 "prepare and provide corporate records to meet the following requirements of Michigan law." They ask for the names of shareholders and corporate directors.

"Every one of these states has hundreds of thousands if not millions of businesses in them and if every one of them pay $125 dollars each to file these corporate minutes or corporate annual report kinds of things, that's a lot of money," says BBB Western Michigan President Phil Catlett.

The BBB  in West Michigan has been fielding the complaints from across the country.

The company shares a business address in Lansing with another business called "Labor Law Poster Service" which according to BBB records Fata also co-owns. A man there who identified himself as a manager told us no one could talk to us, but defended corporate records,

"It's not a scam, we provide a service, the same as an attorney or an accountant would provide," says the manager.

When we went to the address of another of Fata's businesses listed with the BBB, Vintage City Guitars, we instead found another Labor Law Poster Service office with a large call center but Fata wasn't there.

According to court records Fata's home address is this house in Lansing and we found he also has two boats and four cars registered to him with the state.

Fata later called Newschannel 3, and while he did not want to let us record an interview,  he did send written answers to our questions; he says,

"There is nothing misleading about our solicitation documents.  We make it perfectly clear that we are a private entity offering a service, for a fee, to meet the requirements of Michigan corporate law… the only way that anyone could be confused by our solicitation documents is if a person did not read them."

But in all 34 states have put out a warning about Corporate Records, many of those accuse the company of offering a service that may not be necessary… or that organizations can do themselves for free.

The warning from Michigan's Department of Licensing and Regulation says,"in Michigan corporations are not required by law to file corporate records…"

The I-team has also found out the Michigan Attorney General is now investigating the company and says Corporate Records agreed to stop sending its letters in Michigan during the investigation.

Fata says, “the Attorney General's office is investigating our company because of what we believe to be complaints made by, or instigated by, our competitors… as we have done nothing wrong, we are completely willing to cooperate." 

Read more of Fata’s answers to our questions below:

=====================

WWMT: The Michigan Attorney General’s office says it is investigating Corporate Records Service, can you tell us why they are investigating the company?  The AG’s office also says you’ve agreed not to send out letters in Michigan while the investigation is going on, can you say why you agreed to that?
 
RESPONSE: Like most States, Michigan has a law that requires corporations to prepare and maintain certain records on an annual basis.  Specifically, corporations are required to select a board of directors and to document the action taken.  Corporate Records Service offers corporations a cost effective and convenient  to meet this requirement.  This service has traditionally been provided by lawyers, accountants, or other business advisors.  Corporate Records Service offers a way to fulfill this requirement at a cost much lower than what has been traditionally charged by other providers.
 
In addition to the corporate records, corporations are also required to file with the State of Michigan an annual report document.  Corporate Records Service does not offer services to meet the annual report requirement.
 
The Attorney General’s Office is investigating our company because of what we believe to be complaints made by, or instigated by, our competitors.  The Michigan Attorney General’s Office had concern that we were offering to file the annual reports with the State of Michigan and not following through.  On the contrary, we do not provide a service to fulfill the annual report requirement and, instead, our service is limited to the annual corporate records.
 
As we have done nothing wrong, we are completely willing to cooperate with the Attorney General’s Office to resolve any concerns.  We agreed to suspend solicitations on a temporary basis while we work with the Attorney General’s Office.

 
WWMT: Do you consider the letters you send to businesses misleading, what would you say the purpose of those letters is?
 
RESPONSE: There is nothing misleading about our solicitation documents.  We make it perfectly clear that we are a private entity offering a service, for a fee, to meet the requirements of Michigan corporate law.  We indicate in our materials that customers are not required to use our service and, instead, the corporate records can be prepared by the customers themselves, by lawyers, accountants or other business services.  The only way that anyone could be confused by our solicitation documents is if a person did not read them.
 
WWMT: The States that have put out warnings about the company all say you are offering a service that isn’t needed in those States and Michigan says it doesn’t require minutes to be sent in, so why are you asking for money to do that?
 
RESPONSE: We believe that the State’s warning creates confusion rather than providing clarification.  It is true that the corporate records do not need to be sent into the State of Michigan, but we never say that they do.  On the other hand, there is no question that Michigan law requires that corporations prepare and maintain annual corporate records.  We provide a service to meet that requirement that is both cost effective and convenient. Our customers are very satisfied with what they receive and appreciate the value in what we offer.
 
WWMT: What do you do with information that companies do send to you, do you send it to the State?
 
RESPONSE: In order to prepare the documents that fulfill the corporate record requirements, we obtain from our customers information regarding the shareholders of the corporation, its board of directors, and its officers.  With this information, we prepare documents that meet the requirements of State corporate law.
 
WWMT: Why do you think so many States have put out warnings about you or taken the company to court?  Are all of them wrong about your services?
 
RESPONSE: We believe that most, if not all, of the complaints are instigated by our competitors, who usually charge two or three times more than us, or even more.  We offer our customers an unconditional 100% money back guarantee.  Thus, the people who have lodged complaints are not our customers and, instead, are people who have been told by our competitors that we do not offer a valuable service.
comments powered by Disqus
advertisement

What do you want to see?

If you have a story idea for the I-Team, you can contact us using the form below or by calling 269-388-4612.
Please re-enter the code shown in the image below.

Business News

Last Update on January 23, 2015 18:19 GMT

HOME SALES

WASHINGTON (AP) -- More Americans purchased homes in December, yet total sales slipped in 2014 as first-time buyers struggled to find houses.

The National Association of Realtors says sales of existing homes rose 2.4 percent last month to a seasonally adjusted annual rate of 5.04 million. But over the course of the entire year, sales fell 3.1 percent to 4.93 million.

Only 29 percent of sales went to first-time buyers last month, compared to a historic average of 40 percent. Prospective buyers were priced out of the market due to rising home values and relatively stagnant incomes. Still, affordability has improved in recent months as mortgage rates have plunged, leading to the possibility of stronger sales in 2015.

Median home prices increased 6 percent over the past 12 months to $209,500.

LEADING INDICATORS

WASHINGTON (AP) -- An index designed to predict the future health of the U.S. economy posted a fourth straight solid gain in December.

The Conference Board says its index of leading indicators increased 0.5 percent in December after a revised gain of 0.4 percent in November. The index also posted solid gains in September and October after a flat reading in August.

The December increase reflected strength in a number of components of the index. Conference Board economists said this suggested the economy was gaining momentum at the end of last year.

ATLANTIC CITY-WALL STREET

ATLANTIC CITY, N.J. (AP) -- Wall Street is giving a big thumbs-down to New Jersey's effort to tame Atlantic City's finances.

Moody's Investors Service on Friday lowered Atlantic City's bond rating by six steps, from Ba1 to Caa1, which is deep into junk territory.

The move came a day after Gov. Chris Christie appointed corporate turnaround specialist Kevin Lavin as the city's emergency manager and Kevyn Orr, who helped Detroit through its bankruptcy filing, as his assistant.

Christie's executive order appointing the pair indicates a bankruptcy filing is possible to help reduce the city's debt, which Moody's calculated at $397 million.

The agency cited an increased risk of default, and "a rapid, dramatic change" in New Jersey's longstanding policy of preventing a default or bankruptcy of any of its local governments.

EARNS-GENERAL ELECTRIC

FAIRFIELD, Conn. (AP) -- General Electric Co. on Friday reported fourth-quarter net income of $5.15 billion.

The Fairfield, Connecticut-based company said it had profit of 51 cents per share. Earnings, adjusted for non-recurring costs and to account for discontinued operations, were 56 cents per share.

The results surpassed Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 55 cents per share.

The industrial conglomerate posted revenue of $42 billion in the period, falling short of Street forecasts. Analysts expected $42.4 billion, according to Zacks.

GE shares have fallen nearly 4 percent since the beginning of the year, while the Standard & Poor's 500 index has stayed nearly flat. The stock has decreased almost 7 percent in the last 12 months.

UPS-OUTLOOK

NEW YORK (AP) -- The huge cost of ensuring timely deliveries cost UPS during the holidays and the shipping company is now cutting its outlook for the year.

The Atlanta company hired more workers and boosted capacity at its facilities during the busy holiday season to avoid a repeat of 2013, when shippers struggled with a deluge of orders.

UPS Inc. now expects 2014 earnings of $4.75 per share, down from its previous forecast of between $4.90 and $5 per share. Industry analysts had been looking for earnings of $4.96 per share, according to FactSet. For the fourth quarter, UPS expects earnings of $1.25 per share, well below the $1.47 per share analysts had projected.

FORD-OUTLOOK

DETROIT (AP) -- Ford says it will take an $800 million charge in the fourth quarter because of exchange rate problems between the Venezuelan bolivar and the U.S. dollar.

The company says the charge will cut fourth-quarter net income by $700 million, after deferred tax benefits. But the automaker still expects a full-year pretax profit of $6 billion when it reports 2014 earnings Thursday.

In October, Ford cut its full-year pretax profit forecast to $6 billion. That's down from $8.6 billion in 2013.

Ford says in a regulatory filing that the company can no longer exchange bolivars to dollars due to Venezuelan currency exchange controls. The company says the controls have limited auto parts availability and have cut into normal production. But Ford says it will continue operations there for the foreseeable future.

GOODYEAR-RECALL

DETROIT (AP) -- Goodyear is recalling about 48,500 SUV tires after finding small cracks in the tread during endurance testing.

The move has forced General Motors Co. to stop selling about 6,300 Chevrolet Traverse, GMC Acadia and Buick Enclave models until the tires are replaced.

The recall covers 18-inch Fortera HL tires made from Nov. 30 through Jan. 10. Goodyear Tire & Rubber Co. says the problem hasn't caused any crashes.

About 32,100 of the tires were made for the GM SUVs, which are produced at a factory near Lansing, Michigan. Another 16,400 were sold as replacement tires.

GM says the 18-inch tires are on about 30 percent of vehicles made at the plant, and the problem has not affected production.

Owners can have the tires replaced for free at any Goodyear store or authorized dealer.

DEERE-LAYOFFS

Deere to lay off more than 1,000 workers in Iowa, Illinois

Deere is laying off about 910 workers indefinitely from factories mostly in Iowa and will sideline another 500 employees in Illinois until late summer, as the agricultural equipment maker adjusts to demand for its products.

The Moline, Illinois, company also says it is adding 220 jobs at construction and forestry factories in Iowa. It plans to fill nearly all those positions with workers were laid off at agricultural equipment factories last year.

The latest indefinite layoffs will be at sites that build agricultural equipment.

Employees laid off until summer work at the company's seeding and cylinder factory in Moline. That location is going on an extended inventory adjustment shutdown.

Deere & Co. is the world's biggest farm equipment supplier. It employs about 29,000 in the United States and Canada.

US-UNION MEMBERSHIP

WASHINGTON (AP) -- Union membership in the U.S. is down slightly, making up just over 11 percent of the workforce last year.

That's a drop of 0.2 percentage points from the year before.

The Labor Department says public-sector workers have the highest union membership rate at nearly 36 percent. That's more than five times higher than membership of private-sector workers at less than 7 percent.

Workers in education, training and library jobs and in protective service jobs have the highest unionization rate, at 35 percent.

Earnings were higher for union members last year, at $970 a week versus $763 a week for non-union members.

AFL-CIO President Richard Trumka says the report suggests that with 58 months of consecutive job growth, "workers made great strides and confronted great challenges."

EXPEDIA-TRAVELOCITY

NEW YORK (AP) -- Expedia has acquired travel booking site Travelocity from the Sabre Corp. for $280 million in cash.

The deal adds to Expedia's growing portfolio of websites. The Bellevue, Washington-company already owns nearly a dozen travel sites including Hotels.com, Hotwire and Egencia, the world's fifth-largest corporate travel management company.

Since 2013, Expedia Inc. has been powering Travelocity's U.S. and Canadian websites and providing Travelocity access to Expedia hotel supply and customer service program. So for users, this acquisition will have little noticeable change.

The move allows Sabre to focus more on its back-end system for selling airline tickets, hotel rooms and car rentals. Sabre is one of three global distribution system companies -- along with Travelport and Amadeus -- that handle sales for travel agencies and online booking sites like Expedia.

GOPRO-NHL

NEW YORK (AP) -- GoPro has signed a deal with the NHL to bring its wearable cameras closer to the action on the ice and let viewers see games from the perspective of players and referees.

It's the company's first such deal with a major professional sports league. While GoPro would not comment on whether other partnerships are in the works, they would make sense.

As part of the NHL deal, footage from GoPro cameras on players, referees and placed around the rink will be shown as part of the live broadcast of this weekend's All-Star events.

Later, prerecorded footage from the players will be incorporated into TV broadcasts of hockey games.

DAVOS FORUM-CLIMATE-POVERTY

DAVOS, Switzerland (AP) -- French President Francois Hollande is calling for investments in green technology as a way to fight both global warming and poverty.

Hollande, who will host the next crucial round of climate talks, called for "huge investment in the green economy" as he and other world leaders kicked off a year of campaigning to clinch twin deals addressing climate change and poverty.

The interconnected themes took center stage Friday at the World Economic Forum in Davos with urgent calls for nations to support two long-sought deals.

One, slated for talks in September in New York, would establish sustainable development and poverty-cutting goals through 2030.

The other, to be negotiated in December in Paris, would set a legally binding climate pact whose focus is on more near-term emissions cuts from 2020.

advertisement