Depending on the exact details, since WI law requires that termination notice coincide with the end of a rental period, it may be that he owes an extra money or an extra day. We can't know from here since we don't have relevant info.
I'd also write-have him write a letter to the collection agency advising that the amount is disputed and that he-you will deal only with the original creditor. I'd send certified mail, showing on the letter that a copy went via regular mail.
If the collection agency actually bought the debt, they will respond accordingly.
Security deposits can't be designated non-refundable, though the lease might include a provision that the deposit is forfeit if he defaults.
I'd also expect landlord to answer to why notices weren't sent to the tenant at whatever new address he gave when terminating the lease. Don't expect judge to be happy with them if they don't produce a guaranty. (Not sure why your husband only has a copy of lease agreement and isn't sure of anything else he *may* have signed. If *your* name is on any notice, is it possible your husband forged your signature?)
Wisconsin has some very stringent laws about how leases are to be constructed, etc., to the point where I recall folks have gotten judgments for what they paid for the entire lease period back over some silly (and immaterial) foul-up by the landlord in the lease. So read everything very carefully and compare to state regulations.
Don't know why landlord would have to give notice of the lease going month-to-month, though you can inquire with local real estate attorney whether that counts under WI law as an "automatic renewal". Problem is if this goes to court, someone may not be above manufacturing a copy of such a notice and saying it was mailed. Same with notice about not returning security deposit/damages. Depends how smart landlord is.