Legal Question in Credit and Debt Law in California

Civil Litigation and the Fair Credit Reporting Act

I owned a business in Cal. for Six months. I advertised in the newspaper to draw clients. I applied for credit with the paper and was denied as their policy states that new businesses has to be in business for at least six months before getting credit . I was thus a pre-pay account and had to pay for ads before they would run. I submitted my investor's credit card. The card I submitted had no limit and could be cutt off at the discretion of the grantor. It was agreed that I'd be notified when the card was declined. I received a call in August that I had a balance due of $4500 and that the publication had made a error in billing another's card $2500 for ads that we placed back in April. I would never have ordered the ads had I known that the card was not accepting the charges. Anyway, I was a prepay so how could I owe anything? When did they decide to extend me credit? I was recently contacted by a collections agency that has threatened litigation and attatchment of my assetts. My credit has been impecable up until this point. Should this have gone to a collections agency where there are issues in dispute? How strong is my position with regard to the $4500 & the $2500? I would appreciate any advise Thank You.

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