Billing dispute on a DSL modem that I returned few months ago.

Hi, I would like to try get this resolved before it escalates.  Basically, coupel of months ago, my DSL modem got fried by a surge.  I contacted AT&T support service and asked them for a replacement, they said they would bill me $125 and send me another one.  I agreed at first but then changed my mind few days later since I found a cheaper model on Amazon.  I called a CSR and told them I wanted to return the new DSL modem and they said I could just refuse the shipment and I'll get a refund.  I have done that but never got a refund so I tried contacting the CSRs over few months, spent hours on phone being transferred around to different departments that claimed they would get it taken care of but never did.  I decided to file a charge back dispute back in February for $125.  The bank honored it and refunded me around $175.  AT&T have sent me few bills trying to collect on this but since I was just irritated with AT&T at that point so I ignored the bills at first.

Anyway, I would like to resolve this and at least pay back a portion of the bill but will not pay $125 for an equipment that I didn't purchase..