My question involves collection proceedings in the State of: California.
A couple of years ago I needed to purchase auto insurance for my fiance and we went through Cost-U-Less insurance. I've used them in the past before and had no problems. This next time, they informed me of the deposit fee which needed to be made in 2 installments so I made the first payment at their office and gave them a post-dated check for the last payment which was under $240.00. The rep who went over my paperwork had me sign all the documents, briefly explaining to me what each was and so on. A couple of days later, we decided to cancel the insurance because my fiance learned that his mother was able to put him back under her insurance.
I then notified Cost-U-Less insurance that I wanted to cancel and placed a stop payment on the post dated check. Now I learn that a collection is out on me for this check. The collection agency is threatening to report me to the credit bureaus, garnish my wages (which by the way I don't work), and report me to the Board of Education because I told them that I'm unemployed and starting school. I don't think I should pay the money because I cancelled the insurance and already paid them part of the deposit. They didn't inform me that it was a broker fee at the time of signing and that regardless if I cancel I still needed to pay the full deposit. Can the collection agency take me to court and if so, does this fall under a check fraud case? What should I do?

