At this point, they have not broken any laws, from what I can tell.
They are permitted to report on credit reports until shown not to be, generally speaking. There is a dispute process built into the FCRA that is supposed to protect consumers from just anyone reporting false info on their credit. In this situation, they reported on your credit after speaking with you--who exactly reported? Is it the same debt collector you called and requested a statement from? This is where things can get a little tricky. Often there's a debt collector and then a law firm or even another debt collector that the first collector hired to try to collect. If you're talking to MBA Law and some other debt collector is reporting you need to know who to focus your efforts on.
Also, even under FDCPA, credit reporting is not automatically debt collection effort. Some states have ruled that it is, while others have said in their courts that it is not. So, IMHO, the most you could have them on right now is reporting a disputed debt without marking it as disputed by consumer. I think you're on the right track, I would even consider preemptively sending them a copy of your paid in full receipt to show them that the debt has already been paid, as long as you are reasonably sure that it's the same debt they are talking about. That way, you can tell them you want it removed immediately from your credit reports.
Now, if for some reason they do not remove it in a reasonable time after being provided proof of payment, and you are denied credit or your interest rate suffers because of their entry, then you have suffered real damages and you can pursue a potential claim against them--but there are specific steps that must be taken in the proper order to allow you the right to take action.
