Collection of an old cell phone account

I had an AT&T cell phone account, the contract for which ran out in September of 2000. They continued charging me, however, and by the time I realized it and complained, a charge of $222 had been incurred. When I argued the contract had expired, they claimed I had to notify them and ask them not to automatically renew it. I was fresh out of college at the time, and frankly pretty ignorant of credit issues. I blew them off.

Fast forward 6+ years, and here I am trying to clear up my credit. This is still on there.

I have a number of issues. First, the creditor of record on all 3 of my credit reports is Palisades Collection, LLC. However, the most recent letter I received was from the Law Offices of Mitchell N. Kay, who are not reported or listed anywhere on my credit reports. I just wrote them a letter bringing up this very fact.

Mitchell N. Kay have offered to settle the account for $122, which is fine, but I’d be stupid to send them money without knowing it is actually them to whom I owe the debt, right?

Secondly, on my TransUnion and Experian reports, the matter is listed as a collection account, but it also has a monetary value listed (the $222). Both are listed as Date opened: 3/2005, and Date reported: 2/18/2007. Isn’t it illegal to report collection accounts repeatedly and to list monetary amounts for them on the credit report?

Outside of my letter to Mitchell N. Kay disputing the fact that they are the creditor of record, what else should I do? I’ve called Palisades Collection, and they sent me to another collection agency, who in turn sent me to another. Subsequently I got the letter from Mitchell N. Kay, but on my credit reports, it was reported a month ago today by Palisades.

Any help or suggestions would be greatly appreciated.