The collection agency itself has not authority to suspend driver's privileges. The state agency for driver's services is the only agency that can suspend your driver's license.
Georgia law may operate a bit differently than the laws of other states. If you cannot be financialy responsible for a loss you caused there is a mechanism for suspension of your license - but that issue is not the decision of a debt collection company. Take the matter to a Georgia lawyer. Ask about the financial responsibility suspension issue and whether the letter from the debt collection agency violates the Fair Debt Collection Practices Act, as well.
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If they have a civil judgment against him they can request that DDS suspend his license until he pays.
James L. Yeargan, Jr. is licensed to practice law in the State of Georgia. All information given is based only on Georgia law, and is not directly applicable to any other jurisdictions, states, or districts. Any answer given assumes the person who asked the question holds a Georgia Drivers License, and this license is not a commercial drivers license (CDL). This response, or any response, is not legal advice. This response, or any response, does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information. Any state specific concerns should be directed to an attorney who is licensed to practice law in that respective state.