Not sure how to handle this - collection notice

Send the CA a debt validation letter. Explain to them that you owe no money to this company and you will need to see documentation proving this claim. Also inform them that if they put this account on your credit reports you will sue them for listing false information.

Yes, I would definitely not ignore this situation even if you are in the right. Do just as Golden says.

I might even suggest contacting the manager of the repair shop, in writing of course, explaining your side of the story and telling him you are absolutely surprised he sent this to collections. Send that letter CMRRR. See what kind of response, if any, you get back. Document everything that occured with the botched repair, the reason you feel you don't owe for this botched repair, and anything else that supports your claim.

That's probably why the manager weasel didn't say anything but "OK" to you when you told him you weren't going to pay; he knew he would just ship it out to a CA for them to hound you over it.

I would definitely not do business with this shop again, either.

You could always turn around and take THEM to small claims for the damage to the guitar

Thanks for the replies. Anyone at that store would be the last people I'd contact at this point. 2 days after this all went down, I got a call from someone else at the store claiming if I didn't pay them X dollars by X time they'd call the cops and have me arrested for theft (haha yeah, right). I was willing to just let the damage go because I could fix it myself for almost nothing, but I would have fought them on it if they sued me for the balance they claimed I owed. I don't have any desire to sue them over the damage because the burden of proof is on me and I have no way to prove that the guitar wasn't damaged when I took it in.

One question, I read in an older thread that CAs don't have a time limit to respond to validation requests, so this could potentially go on for months. If the store has only my name and address (no phone, no credit card info, etc), how can the CA put anything on my credit report? For all anyone knows I could have used a work address or fake address? Can they still report a collection to the credit agencies with only a name and an address?

If they hire a legit, licensed collection agency, they can trace just about anything through name, phone number or address. You could always deny deny deny.

then again, this is not a credit transaction, so if it shows up on your credit report at all, then you can sue them for reporting a non-credit transaction to your credit file.