This sounds like a classic dunning letter. Look carefully...there should be a blurb in there somewhere about having 30 days to notify them (in writing) that you dispute the debt in question.

I would send them a DV letter right away (certified mail, return receipt).

If you don't challenge it, and the debt in question is less than 7 years old, they could put it on your CR. Not something you want showing up in the midst of trying to buy your 1st home. 

Good luck! 

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+1  You need to get that DV in the mail.  Being as you have just received a dunning letter, it will be considered timely and thus cease collection activity until they validate that the debt is yours.  You say that you have never had a citi account,  if this is the case then perhaps it's a case of mistaken identity or identity theft.  Get that DV in the mail so that you know where you stand.

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It also states

"our client has advised us that they are willing to settle your account for 35% of your total balance." Would they be referring to LVNV funding? Also is anyone familiar with LVNV funding? If it has anything to do with Las Vegas NV, I can absolutely say that I haven't lived there since early March 2005. Any debt that I may have occured there is definitely beyong the SOL.

LVNV is just the name of the CA.  They aren't an OC of any type.  It's just the name of the company.

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Starting Score: 504

Current Score: EQ FICO 819, TU08 775, EX "Who Knows?" Quizzle 756
Goal Score: All Scores 760+, Newest goal 800+
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