Bank paid company after I'd cancelled card!

I went on holiday in Feb 09 and "attempted" to hire a scooter, I gave my CC details for insurance purposes only. The bike was delivered without them leaving me the key to it. I contacted them immediately and they accepted this, then later denied it. They took no money from me initially and had nothing in writing saying I had dealt with them...other than my CC number. Needless to say I was not prepared to pay for any "service" whatsoever. I cancelled my card when I got back and told the bank why I was doing so. However last week I received a form to complete from the fraud squad as they had tried to take funds from this (cancelled) card. I phoned the bank, filled in the form and sent a covering letter all stating in no uncertain terms "do not pay" whilst explaining the reason why. A few days later I received another form to complete, only for me to discover online that they had paid this company without me even having time to send this 2nd form back.

How then is it possible for them to take money from a cancelled card after 2 months?
Why, after I'd kept them informed every step of the way, has the bank ignored me and took it upon themselves to pay for a service I wasn't prepared to, with my money?

I'm more annoyed that this company got paid than I am of losing this money, and even more annoyed at the bank.