Credit Reporting After Settlement

by William
(Fort Campbell, Ky,USA)

I made an agreement for a settlement on a collection with Jefferson Capital which they took the money out of the bank account on the 20th of May 2010 but they had sent an update to the CB's on the 14th renewing the debt with a current balance and a past due balance with no mention of the settlement agreement.

I received a letter from them on the 1st of June 2010 Dated May 27th 2010 stating that the settlement obligation was fulfilled and advised me of the tax implications since the balance was over $600, I disputed this and the CB validated the debt. How is this reporting legal? and what should I do to handle this?

I have called and they advised me that this is the way it was done that even after the settlement the balance would be listed as current and past due! why should I have paid it then? this is a scam, my scores have dropped an average 45 points since this collection company failed to honor the agreement.

I am in the Military and am wondering should I get JAG involved in this?