@bcguybc - yes, you are probably being a little too paranoid. That is just a contingency against you charging stuff onto the card again (and I assume the card is frozen so it's a long shot, but there could be some kind of pre-authorized payment or something that might force-push itself on there).
Anyhow, collection agencies aren't allow to add fees onto the debts they're collecting - it violates the collection practices act.
Remember collection agents aren't "out to get you", they really just want the debt settled.
Take the settlement.
@david17
"Would an R9 look the same on a employer credit reference as a bankruptcy?"
No, in the grand scheme a bankruptcy is worse than an R9. Many employers will ask "Have you filed bankruptcy..." but there are only a few careers that an R9 will trouble you.
Anyhow, a paid or settled R9 reflects more favourably on you than an unpaid R9.