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Online Company threatning to charge me £700 for not returning original packaging

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Hi

I recently bought some hi-fi equipment online and one compenent was faulty. As soon as soon as i started it up it ate a CD, and i couldn't get it out.

I called the company the following monday and they admitted the mechanism was faulty and would send me a replacement to my work address they following day - which they did.

I sent the faulty component back to them in pristine condition in a bag with all the leads cables, manuals and asked the Fedex guy to look after it. I was horrifed to receive a call the next day from the company the next day to say that because the item had not been sent back boxed up in it's original packaging that they would have to charge me for the unit again. It cost me £700....! They also said that the cables, leads and manuals were not with the machine.

I said that at no point did anyone mention returning a faulty item in it's original box and that if i had know i would not have been so stupid as to send it back without it. They pointed me to their website and said that it says on the website about returning an unwanted item properly packaged. However, my item was not unwanted but faulty. I sent a letter disputing their claim and received an email response this morning saying they will be getting back to me shortly about "how best to proceed".

I am really worried they will take the £700 off my card as they have my details. Can anyone advise what my rights are and if they are allowed to charge me for this, or deduct money from my card without my consent?

Thank you.
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