Shay,
Be careful dealing with a debt collector on the phone. Based on your commentary you may have inadvertently admitted to the debt collector that the debt is valid.
You said:
"I filled out an application for the card (to receive the free gift) in 2003 and when a letter came telling me that I was approved (and had to pay $30+) for the card, I decided I didn't want it, so I never picked it up."
I am not an attorney so I am not advising you on this issue, but these are theoretical circumstances I would conduct.
Personally I would never speak with a debt collector on the phone. If I were to speak with a debt collector on the phone I would record the call. Prior to recording the call I would research if my state were a one-party state and what level, if any, the debt collector has an "expectation of privacy." I would only discuss issues in writing via certified registered mail. If the debt is not mine (not valid) I would challenge said alleged debt in writing by requesting a validation of said alleged debt (perhaps not wise in your circumstance - see note below). I would also send a letter to the original creditor challenging the alleged debt and appraising them that unfounded collection activities are occurring against me originating from them (again see note below). If the debt collector and/or the original creditor does not reply within 30 days then I would write the credit reporting agencies and send a copy of the letter I sent to the debt collector (and original creditor) and request the collection item to be removed from any report since it had not been validated. I would also request that a written investigation report be remitted to me at my current address. I would also review the pertinent sections of The Fair Debt Collection Practices Act, The Fair Credit Reporting Act, and any applicable state statutes and consumer protection acts. Also I would refer at all times to the debt as alleged and deny it outright (if the alleged debt is indeed invalid). I would also include a statement in any correspondence that states something like "I deny this alleged debt and in no way should any statement I have made be construed as a validation of this alleged debt." I would also conduct searches on the internet as a resource for validation letters then consult an attorney with said letter for their recommendations of additional inclusion or exclusion of language. Preferably have the attorney send the letter on their letter head.
You should consult an attorney regarding your issue. Yes it will cost you money. Potentially several hundred dollars over a period of about a year or longer. Be aware that if you attempt to solve such a credit issue yourself you could complicate matters significantly and end up with the alleged debt becoming a legally enforceable and valid debt (research default judgements). However, in your circumstance it may already be a legal debt; you would have to speak with an attorney about that issue.
Also speaking from experience it took me about four years to remove over 50 revolving trade items and one instalment account (mortgage), none of them mine, from one of my credit reports. I did this myself and can tell you that I will never do it again. I will happily hire a lawyer to deal with such issues.
Get a lawyer and save yourself the hassle. If you are worried about the costs think about the costs in higher interest rates or denial of credit. Furthermore, think about this: if you work in the financial sector or require security clearance you may risk your employment or be denied employment.
I would recommend hiring a lawyer and getting all pertinent documentation:
Have a copy of your credit report.
Have a record of every time you have been contacted by or have contacted the debt collection agency.
Provide your attorney with a transcript (recording) or notes of what you have disclosed to the debt collection agency on the phone or in writing.
Have the debt collection agency's address and phone number.
Note:
In your circumstance you did fill out an application. This potentially indicates a signed document exists for a contract for an account. This could complicate things for you significantly. Just because you did not pick up the card does not mean the account was closed. You did apply for an account and were subsequently approved. This is a fact that an approved account in your name was opened. You may be potentially held responsible for "membership" fees (and subsequent late fees and other penalties) on said account that was left open, which you failed to close. Of course if you never received a bill or were not properly billed you should state that to your attorney as it may have some bearing. You really need to consult an attorney to determine what legal options are open to you.
Lots of information; sorry if it's not all what you wanted to hear, but it's hopefully helpful. If I were in your circumstance I would consult an attorney. If you really are concerned about costs then research if your state has a legal referral system or free legal aid. I know in Texas there is LRS (legal referral system) and if you go to an attorney based on an LRS referral the initial consultation is on $20.00, but after that it is full price. Some counties offer free legal aid and advice services (and yes representation).
Personal word of experience. When dealing with an attorney do not bother them on a daily basis unless you what a really high legal bill. Ask the attorney to give you milestone reports and have that factored into your bill upfront. E.g. pay an upfront retainer to cover majority of the costs including calling you and updating you on your case, say every two or three weeks for 15 minute calls each. Keep conversations on the phone or in person short and to the legal issue(s). Good idea to keep all information in a file for quick reference.
Good luck,
-S
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