Not sure what country you're in, but here in the UK the law is on your side. * Get everything in writing. Keep copies. Inform both MS and the collection agency

Not sure what country you're in, but here in the UK the law is on your side. * Get everything in writing. Keep copies. Inform both MS and the collection agency that they're in error. Send it recorded. Make them sign for the letter. * Next, ignore them until they either take you to court, or put something on your credit record. Only a court can force you to pay a debt like that. * If they take you to court, you have a period of time to respond. You don't need to physically go to court in most cases. * If they put something on your credit record, take them to court to have it removed. That costs about £70. The record comes off in a matter of days. * Any court judgements issued can also be overturned, if you have a good reason for not responding in time. * Any costs (eg that £70 above) can then be reclaimed through small claims. A small claims filing costs about the same, but you just add it to the claim you're making. Add on postage, travel, etc. * Remember the judge will recognize the sleazy agencies. (They will probabaly deal with several such cases every day). If you have the proof in paperwork, they will find for you. * Once overturned, they cannot take you to court again for the same amount. If a judge decides the amount is wrong, you cannot be harrassed again for the same amount. End of story. You've probably now lost the money however since you've essentially admitted fault, but you may be able to put it through small claims. Not sure.