Vehicle that was pd off and title given is now listed as pd

I paid off a vehicle in late 2007. I had been behind by about 2 payments, which were paid every other week. I found out the balance to pay off and paid it. After a month, I had not received the title and called them. I went round and round with them for a few months and everytime I called they said I still owed the balance. I'd tell them it was paid and they would check and say they saw it, it wasn't posted correctly. Eventually, I got my title. Fast forward to 09/2009. I sold the vehicle to junk company and signed title to them. Then bought new one thru same company. They said there was a balance due for old vehicle, same amount as I paid. Told them it was paid, they asked if I'd received the title. Told them yes, they said it was oversight, they'd take care of it. When I recently checked my credit report, they had it listed as a paid charge off. Was not on credit report last year that way. I called them and they said that in their records, there was 90 days of no payments before they got the payoff. This has to be the time that I kept calling them. After 3 yrs, I don't still have any receipts. They said final payment was 12/07 even credit report says 11/07. Said after 90 days of no payment it gets charged off and can never be changed. Is this right? Can they do this?