Yes, what your parents did was fraud. Possibly most importantly, what they did, since they took your mail/check and cashed it, is considered mail fraud, a FEDERAL crime. Since it was, I assume, against a financial institution, it can carry a punishment of up to $1M and/or 30 years in prison.
I don't know if I'd dispute it ... while I don't think that they would press charges, considering that it's paid, I think I'd write a goodwill request letter and explain the situation (leaving out that it was your parents that committed the fraud -- you never know if the person reading your letter would file a complaint), saying that a family member opened the account, used it, and paid late. And could they please, pretty, pretty, please remove the lates as a gesture of goodwill?
Again, I don't THINK they would take the matter further and complain ... but you never know. Since you're not disputing that it's YOURS (at least, not OFFICIALLY), I think saying that it's not yours and you would like some consideration based on that fact, I would think it would suffice.