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To a limited and dangerous extent, yes, and this can be used to initiate administrative actions. The problem is that the initiator, the debt collector, knows that their claim is fraudulent in fact. It's one thing to have limited liability to attempt to collect - its another thing to defraud the court by claiming actual creditor status that you know you don't have. Because even if you win a judgement, your victim can later file against you and have that judgement vacated, and criminal charges pressed, for that very same fraud against the court.

Certainly true. But the average person does not have the knowledge or even the financial resources for a court fight. It most case an attorney may cost as much or more than the total amount debt, interest and fees the debt collector is claiming.

The break point used to be around $2000 to $2500 before a debt collector will make the effort to file a claim in court. However, if the collection company files in court and the affected person does nothing it will result in a judgement in favor of the plaintiff debt collector. It is better to take immediate action and try to nip it in the bud. Even if the debt collector takes it to court you will have already built a paper trail of putting them on notice to support your case.