Sterling & King Debit Collector states I owe money from Upfront Money Fern Park , Florida

Received a notice on my Credit Report the other day stating that I owed money to a Company from Upfront Money from 2007.  Never heard of them.  Then in the mail today, I receive a letter from a collection agency called Sterling & King stating that I defaulted on an agreement that I had with Upfront Money for pre-paid digital phone cards.  They have my SSN and my banking information. 

Why is this the first time that I have ever heard about this?  Why in the world would I want pre-paid digital phone cards.  I have a cell phone.  Andy why if I did owe money to this company would they wait 3 1/2 years to try and collect?

They say...Commencing Arbitration.  The arbitration must be filed with the office of the New Castle Country Courtyhouse located at 500 North King Street, Lower Level 1, Suite 500 Wilmington, DE  19801.  If you initial the arbitration, you must notify us in writing at Financial Processing, PO Box 514, La Crosse, WI  54601.  If we initiate the arbitration, we will notify you at the last known physical or email address on file with us in your Financial Processing Membership.

So they are located in florida, arbitration needs to be filed in Delaware, but if you file, you need to write to someone in Wisconsin.  This makes no sense.  I have been racking my brain trying to think about what I did in May of 2007 that anyone would have my banking information.  Then I realized, my husband and I wanted to go to Walt Disney World and take our Daughter.  So we agreed to listen to a time share in order to get discount tickets.  We had to purchase the tickets on-line and they called us to confirm, then we went to Florida (Fern Park I believe) to pick up the tickets and the listen to the Time Share presentation and then go to go to Walt Disney World.  I am now wondering if this is the SCAM that is being played on me.  Well not funny.  Need to get to the bottom of this and get this mess cleaned up.

Also in this 11 page document that Sterling & King sent to me stated that I had the right to terminate my membership.  How can I terminate something that I didn't know that I had?