Switching provider and subsequent charges

Could somone please clarify contract cancellation charges for me? We have been with BT for five years now, so our initial contract has finished and each year it has been continued.  However, thanks to someone 'hacking' into our phone line, we incurred a bill of £250 which BT has declined to refund.  Anyway, because of this and a gross lack of concern for a good customer, we have decided to switch provider.  As a result of this we are now being asked to pay a charge of £96 because we are still in contract.  So far we have received mixed comments by friends and family,on whether this is correct or not so would appreciate any advice. We begrudge paying BT another penny after what's happened.  Also, we used to get emails letting us know when it was time to renew, we've not had a thing for several years! It's very annoying!

I guess you're on an auto-renewing contract with penalties for early cancellation. These were outlawed by Ofcom from 31 December 2011 but any already in existence may still carry early exit penalties until the end of 2012.
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