Problems with Verizon...Can I Litigate?

I had an outstanding balance of $180 for a Verizon residential account that has been reporting to all 3 bureaus. They sent the account to Afni, Inc. for collections, who were also reporting to all 3 bureaus. All correspondence I have received from Afni, Inc. lists my outstanding balance with the original creditor as $115.59, NOT $180.

I received a settlement offer from Afni, Inc. in early June for half of the amount owed according to them, which was $115.59, so my payment for settlement was $57.79. I responded to Afni with a PFD letter, and they agreed in writing. I paid off the settlement in mid-June and Afni promptly deleted their reporting from all 3 bureaus. They also sent me a letter saying they were in receipt of my payment, my settlement was finalized, and my account was closed. Yay! I didn't even have to dispute them.

I then disputed the Verizon entries with all 3 bureaus. This was also in mid-June. They VERIFIED with all three that I still owed them $180 (not $115 as per Afni) and updated my reports to reflect that the amount was verified as of June 2008. Grrrrrrrrrrrrr.

I sent Verizon certified mail on July 2 with copies of the Afni statement showing the original amount due of $115.59, the settlement offer for $57.79, my payment receipt for $57.79, and the last letter from Afni stating the account was settled and closed. My letter informed them that they had 30 days to update my report to remain in compliance with the FCRA. Also on July 2, I opened a complaint with the BBB. I haven't heard anything back from the BBB yet, but the certified letter was delivered and received by Verizon on July 7.

On July 14, I re-disputed the Verizon account with all 3 bureaus, thinking that a week was enough lead time for them to hopefully correct my reports. WRONG! They have already verified with Experian that I STILL OWE THEM $180. Not $115.59, but $180, and they also make no mention of anything showing that I have paid them or that the account is settled and closed! Unbelievable!

To make matters worse, on July 8, the day AFTER they received my certified mail but BEFORE I disputed with the bureaus or they verified the wrong amount again, I received a collection letter in the mail from an entirely different CA asking for the entire amount of $180! I have yet to respond to this letter, because I wanted to see what the outcome of my certified mail to Verizon would be. Now that I know that they have done NOTHING, I am incensed about getting a second collection letter from a different CA.

It hasn't even been 30 days yet and not only are they still verifying incorrect info to the bureaus but when they verified with Experian they did not note that I was disputing the amount AND to add insult to injury they are continuing to try and collect on a debt that has been paid AFTER I disputed with them!

Can I sue them in small claims and on what grounds? I am sick of this!

 

I definitely plan on letting the new CA know that the account has been settled but what can I do about Verizon and the inaccurate reporting to the Bureaus?

 

Why federal as opposed to state? Am I eligible to sue in both or would I want to bypass state altogether and go straight for federal?

Also, I am waiting for the results of the latest dispute with Transunion and Equifax, but I'm assuming it will be more of the same since they stupidly verified with Experian again. Should I wait for those results and then dispute again with mailed hard copies of documentation (I've only disputed online so far), or go ahead and mail in hard copies of everything while they're still working on the Transunion and Equifax investigations?