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I had something similiar happen with a Dedicated Server place, was running me like $120/month for a cheap server. I'd paypal my payments and had to remind them every month to NOT shut off my server (even though they had my money) so I said screw it and cancelled, and after all the cancel forms were done and everything, they send me a bill like 6 months later saying I'm over due on my payment. To make a long story short, they tried saying I never cancelled, and even uploaded stuff on their own so bandwidth reports showed bandwidth usage and claimed lawyers would get involved if I didn't send them the $120, so I called their bluff and told'em to go for it. Next day I got a call apologizing for the 'mistake'.
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