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Carphone Warehouse O2 (false) Default ...help!!

I'm searching for clues as to how to resolve my problem, but I've never blogged before...it's all a bit beyond me!

How do I get a default (that is false) removed?

Solicitor wants £230 in the first instance to take this on... (so, last resort I think)

I applied for a mortgage some weeks ago and was turned down.
My broker told me to check my credit report (I'd never done this before).

I found that I had a default from Carphone Warehouse reckoning I owe them nearly £700.
I'd had an O2 contract from early '03 and ended it (in writing, as told to when I initially phoned) in Dec '05 and cancelled the DD. I then bought a pay-as-you-go sim.
I heard nothing for 3 -4 months then left the address in April '06.
I was in ignorant bliss about this until August this year.
After numerous emails to CPW I'm getting nowhere. Initially they said they have no record of issuing a PAC !?, therefore, the contract was not cancelled. After I found out what a PAC was, I emailed to say I didn't reuse my old number so didn't need a ‘Port Authorisation Code’. I requested a copy of my original contract.... which they can't find!
In the last email I had, I was told that 'As I didn't use the PAC (that wasn't issued!!) within 30 days the contract kept running!!!! and they couldn't contact me as I moved ...(that was 4 months later!) And, luckily for me, the system ended the contract in '07 or I'd be paying more!!'

I can't believe they have the power to discredit people like this.
I've had nothing from them, they are trying to get me with a technicality, and it seems completely mean and vindictive.
Can anyone help?



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