Britwife - thats just disgusting - keep all correspondence, from what you've said there, that sounds like a 'threat' from them.
Also, I fully condone the application of Niku2's idea of sending a parcel containing poop to the idiots who are threatening this to you.
Also, you should speak to your local newspaper, maybe stand outside their offices with a leaflet explaining you are currently being ripped off by them (I think its legal to do this if you dont cause a disturbance but not sure - look into it though) and maybe post up a bad review of them on any internet sites they may advertise on etc.
I hate stupid dodgy business people no matter what industry they're in...
Good luck and let us know how you get on..
cheers DtM! West London & Slough UK!