Keep disputing. Take everything from them in writing. Document every contact. Push your position hard and if they deny, pursue a legal action. With under $5,000 at issue, you can file a small claim and represent yourself. Good luck!
My answer is just my thought about your question, and not legal advice because you and I do not have an attorney-client relationship, which may begin only if we both sign a retainer agreement. Other lawyers may analyse your situation differently. Also, the answer may be different in your state. Be aware that I may not be licensed in your state. I am only licensed in Washington and Idaho. Be aware that my areas of practice may not cover your question. I practice Debt Settlement, Business, Asset Protection, Tax Reduction, Contracts, Real Estate Transactions, IRS, 501(c)3, State Departments: Labor and Industries, Employment Security, Revenue, Licensing.