Hello thanks for your patience.
You are effectively paying for a service you are not receiving. This is a breach of your consumer rights, pursuant to the Consumer Rights Act 2015. I would suggest in the first instance you report the company to Trading Standards for their conduct and the unprofessional way they have dealt with this issue https://www.gov.uk/find-local-trading-standards-office
You clearly have evidence that you posted the phone back and there is no reason for you to send them an empty box and continue to pay for a phone you do not have.
What you need to do is write them a formal “Letter Before Action”. In this letter you will need to state the amount you are seeking to recover and the reasons why and confirmation of cancellation of the contract. You will also need to give them a deadline to raise the payment by, usually it is 14 days in which to receive payment.
If payment is not received within 14 days, then you will need to issue a claim against them in the small claims court. You can do this by visiting this site https://www.gov.uk/make-money-claim
Or you can do it by post by using form N1 which you can find here Form N1: Make a claim against a person or organisation (Claim form CPR Part 7) - GOV.UK and posting it to:
County Court Money Claims Centre
PO Box 527
Due to the value of the claim you do not need a solicitor and can do this yourself. Once you issue the claim, interest will be added onto the amount from the day you issue until the date judgment is awarded. This is pursuant to section 69 of the County Court Act 1984. There will be an issue fee to pay, but you will recover this back.
It may very well be that the letter before action you send will make them pay promptly and you do not need to issue, but incase they don’t pay you, then the letter before action enables you to be able to start proceedings against them.
From what you have stated it is likely judgement will be granted in your favour and you will recover your money back. If they don’t pay after judgement has been awarded, it means you can then take steps through the court to enforce it against them.
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