If you're in Arkansas, it's reasonable to assume that they hired a lawyer in Arkansas so they would be positioned to sue you in Arkansas. As you didn't follow the instruction to identify your state, I can't suggest what "proper procedure" would be under the laws of your undisclosed state.

If you haven't paid your credit card since September, 2006, it's no big surprise that interest, late fees and penalties could take a $487.32 up to $1026.80.

If you've received a copy of a proposed consent judgment, it stands to reason that you've been sued by this law firm. What do you mean by a "request for verification of the amount etc."? Are you equating a lawsuit against you with the first contact by a collection agency under the FDCPA? How much time passed (the exact number of days) between the first contact you had with this firm and the time you sent off this letter? If you've been sued, have you answered the lawsuit with the court?