I hope this message finds you well, present circumstances excluded. I am a licensed attorney with over a decade of litigation
experience. It is a pleasure to assist you today.
They can only report that which is contractually obligated or bound between the parties (you and them). Therefore, if the original contract
had this escalation authority in it, regardless of whether they verbally reported this to you, then you are legally liable to pay it if you signed the contract.
As such, if you have not paid off the balance when due, or within 90 days after the first due date, they can turn you over to collections and report this to the credit bureau.
As long as there is contractual language in place between you and them that allows this process (which there likely is in the small print), then they are not violating any credit laws with reporting you to a collection agency.
In short, it all depends on the language that is present in the contract you signed. If there is no language in the contract which would allow this, then they have no right to do it. If there is no language, you can get an injunction against their attempts at collection.
If there is language, you will have to pay it.
Let me know if you have any other questions. Please rate my answer positively if this has helped you.
Best wishes going forward!