I have asked for ATT service they said they cannot give it with out credit card, but they started sending me bills. Do I need to really pay them. I received a mail saying that they are going to send it to Collection agency. Please guide me.

I am not sure what you are asking are you saying you want service or you owe? Are they trying to charge for services they never provided?

If you are receiving the service you requested, then you need to pay. If you haven't received any service, send them a letter stating that you won't be paying because of that fact.

If you have received service but refuse to pay, they'll send the debt to a collection agency who will post it on your credit report within 30 days of notifying you of their collection attempts. For a measly $56 bucks, I'd pay them to keep it off my report... that is, if you received the service.