Make a formal complaint in writing to Sky and then with the relevant ombudsman if you have to.

http://www.sky.com/helpcentre/complaints-code/

When you took out the subscription they should have sent you the terms and conditions that applied. I think with Sky, you sign up to a minimum subscription period of 18 months and in the event of cancellation, you have to pay the relevant amount. When you phoned them, they should have explained this. If they did not, then you have reason to complain.

Once you have submitted the complaint, they should put collection on hold. Send a copy of the complaint letter to the debt collection agency, advising them that as the matter is now in dispute, per OFT guidelines, they should put all collection activity on hold. If they do not do so, they will be reported to the OFT.

Hopefully Sky will resolve for you. You might have to pay something, but may be able to negotiate a reduced amount.

My experience with a relatives debt, is that Sky do not stop trying to collect. My relative left the country owing less than £40 and they were incorrectly traced to my address. Six years later they were still employing a debt company to chase for payment. So don't ignore. Make the complaint and try to resolve with Sky.

Hello all last yr we took a subscription out with sky for 6 months payments were fine paid by direct debit etc but then we just could afford to pay so i contacted them and told them we could afford and wished to cancel are subscription i have now recieved a bill from a debt collection agency for £703 which £500 is cancelation fees, i contacted sky and was told they couldnt send me a bill but that was definatly what i owed as we canelled the phone, broadband and tv ,

I thought i was doing right by cancelling now this is just becoming a nightmare , I never signed any agreements as was all done via the phone does anyone no if i can work around this or will i have to pay it .

Kat