Send them a certified letter (otherwise they will claim they never received it). They will attempt to verify the debt and must send you a copy of the verification within 30 days.

If they do not, then they did not verify the debt. If they send you just a statement of when a charge was made, but not by whom or where, they did not verify the debt. If the debt is more than seven years old, then the debt is no longer legally valid and unverified. If they are unable to verify the debt, dispute the debt on your credit report as unverified.

Once they have responded to your verification request (or more than 30 days have passed), send another letter(certified or they will claim they never received it), requesting that they cease and desist all communications by phone and mail to you. While this should stop any phone calls (if it doesn’t, file a complaint with the FTC as they will be performing an illegal act), they still have the right to attempt to collect by mail.

Do not agree to pay them anything – either in writing or over the phone. Do not verify any information with them either in writing or over the phone. Doing so can be seen as you verifying that the debt is valid and owed. Keep your guard up. Debt collectors are some of the most unscrupulous bunch of people out there. They will say, do and try just about anything to get you to agree to pay them money.

If they are able to come up with actual verification (such as itemized charges along with copies of signed charge receipts), then you will owe the debt. Unfortunately, most companies will not deal with you once they have turned the account over to a third party debt agency, and you will have to deal with the debt collector. Fortunately, if you find yourself in this position, the debt agency purchased the debt for pennies on the dollar and can usually be negotiated way down from the original amount.

I know that the letter they sent you sounds all legal like and threatening, but there is little they can do to you other than report the debt to a credit agency, which they have already done. They could try to take you to court, but then they would have to expend court costs and attorney fees to get a judgment of less than $90 – which is a serious money loosing proposition for any debt collector.