The last time that happened to me, collections took one look at the notes on the account, apologised, informed me that his manager was now writing an extremely annoyed email to billing, and had it fixed before I was off the phone.

Collections tend to be more likely to play hardball, but they often also tend to contain smarter humans. Sometimes this helps.

I did this once, and was impressed with how intelligent, friendly, and helpful the collections agency was.

Unfortunately, billing responded to the collections agency by yanking the debt back from that collections agency and referring it to another, meaning I had to start all over again. I don't know if that's against the rules, but it didn't seem fair and certainly wasn't nice.

Comcast ran the same scheme on me when I cancelled. Sent me to collections for "unreturned equipment" after sending me a receipt confirming receipt of equipment. My assumption was that it was retaliatory since I had the bank stop payment on a recurring monthly charge they billed me for after I had cancelled my service. Took months to sort out. Stuck on DSL now, but when you count the time I don't have to talk to Comcast, it still feels fast.

Exact same thing happened to me with AT&T, and when someone informed me it was sent to collections, I informed them they would be hearing from a lawyer if it wasn't resolved in the next 24 hours. This was after I had documented proof that it had been paid. These companies are abysmal.

I doubt there is any kind of actual contract in play, so either party can choose cancel the relationship at any time. I would just send a written notice in addition to making sure they've heard about the cancellation on the phone (and recorded it). As long as they've been reasonably notified, you're not buying their services anymore.

Big business (and especially the collections agencies they usually send this kind of supposed "debt" to) love to say a lot of things, but that doesn't make it legal.

So they claim some account is "in collections", implying you have some sort of debt to them. If they say that publicly[1] and that hurts some future opportunity due to the "bad reputation", then a libel (or slander, as appropriate) lawsuit should be filed. While each case would be different[2], you create a lot of the mess by acknowledging their incorrect claims.

Business walk away from stuff all the time, and so can you. If any restrictions were desired, they should have been written into a proper contract beforehand.

incidentally; this is also why "identify theft" is a stupid term - nobody stole your identity, which is immutable. What someone did was defraud a bank to get money. You were not a party to that transaction (or crime). The fact that banks wan to be lazy ad not do proper background checks on people they loan money to does not give them the right to recover that money from a 3rd party, not does it put any amount of fault on that 3rd part). Calling such a situation "identify theft" instead of "lazy bank loses money and blame it on an innocent 3rd part" is a modern version of "they were asking for it" style victim blaming.

[1] I include Experian/Equifax/TransUnion/etc in this - despite. Saying something incorrect - with the purpose of advising another business that that you are probably an expensive risk - is the very definition of libel.

[2] As always, check local laws and ask a lawyer

Also chiming in: same thing happened to me, but they sent my account to collections without notifying me first.

When I was on the phone with the collections agent, I was very polite and told her I knew she was just doing her job. I then got her to admit that this sort of thing happens all the time with AT&T, and that a lot of her phone calls go the same way.

Since then I've suspected that AT&T's practices go beyond mere incompetence and into abusive territory.