The Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from threatening to do something that they don't really intend to do. The most common violation of this part of the FDCPA is when a debt collector threatens you with a lawsuit if you don't agree to pay the debt. This FDCPA violation requires two things: (1) that the debt collector threatened to sue you; and (2) that they didn't really mean it. So how do you know whether the debt collector is lying when they threaten legal action? Here are a couple of indications:
the amount of the debt is small;
the debt collector does not have an office in your state;
the debt collector does not have a licensed attorney in your state;
the collector threatened a lawsuit and months or even years went by before they sued you.
There are other indications as well, but its tough to know whether they apply before bringing a FDCPA lawsuit. For example, the debt collector may not have the creditor's authorization to sue you, but there's really no way to know that until you get into litigation and can use discovery to figure it out.
This part of the FDCPA probably also applies to many veiled or implied threats of a lawsuit. For example, courts have found FDCPA violations from the following statements:
The collector "can" or "may" sue
The debt would be referred to a lawyer "for collection action"
The collector is authorized to proceed with legal action