I signed a three year agreement for an internet service. They cancelled my service due to "inability to gain funds" from my checking account. According to the company, the request for payment was denied by my bank. This is impossible on several accounts, first because there was more than enough money in the account, second because even if there was not enough funds to cover the charge my bank pays the debit and then charges me for the overdraft and finally because according to the banking records no attempt was made to withdraw these funds in the first place. After all this took place and my internet service was interrupted, I immediatly called them and was told they no longer could use the debit card and must use a credit card, which I did and they proceeded to charge my credit card for the months I was missing payment for. There was no mention of a breach of contact at this time. For the last four months I have been using this service without a problem. They are now claiming that I have breached the contract and sent a claim for 500 dollars to a collection agency. What can I do to keep this claim from affecting my credit report and how can I get them to drop the 500 dollar claim?