Old Debt

I received a letter stating that the records of Paypal, Inc. show that I over $1,000.00 Then it stated that their client was willing to settle for 50% of the balance. This is a dispute from 2001, over 9 years ago and well past the SOL. To make a long story short, buyer didn't like an item, he was supposed to return it for a refund but never did. PayPal got involved and I submitted the tracking number. Then they closed the dispute. That was the last I heard of it. Apparently the scamming buyer then did a chargeback and kept the item. I told them this is fraud and he has to return the item if he wanted a refund. I never heard anything about this since then (2001). Now over 9 years later it pops up via a collection agency. I did some research and there are MANY other people getting these letters and phone calls from ERsolutions over PayPal transactions from 2000-2001 and they are "willing to settle for 50%."

I was going to throw the letter away but the collection agency is also calling several times a day.

My question is what kind of letter should I send to this collection agency since it is past the SOL? Should it be a SOL expiration letter, SOL expiration letter AND debt validation letter, or Cease and desist letter? Thank you for your time.