Executive Summary: 1and1 tried to withdraw money from my PayPal account for domain renewal, despite the fact that I had both turned off automatic renewal and canceled my entire package with them two months prior. They still have not agreed to cancel the invoice. Their customer support has been unable to resolve the situation. I will report them to the Attorney General of Pennsylvania, which seems to have worked for others in the same situation.
Long story: I had signed up with 1and1 for hosting a single domain for one year. About two months before the contract was about to expire, I decided I did not need the domain anymore. I used their web interface to first turn off automatic domain renewal, and after receiving email confirmation that automatic renewal had been turned off, I proceeded to cancel my entire package with 1and1. (The rest of the "package" beeing dns hosting and a simple webpage which came fee of charge with the domain registration.) I also received an email confirming the cancellation.
In the next three months I did not hear from 1and1, except for two automated emails telling me that I should turn on automatic renewal or I risked loosing my domain.
Then about a month after my domain should have expired, I got an automated email with an invoice for renewing my domain. I wrote back to the billing department, explaining that they had made a mistake, but I got no response. Instead, I got a new email a few days later, saying that they had attempted to withdraw funds from my PayPal account. (I had contacted PayPal, denying any transfers to 1and1.)
I wrote to the billing department again, but got no response until I also wrote to email@example.com. (That address is not listed on their contact page, but apparently goes to somewhere higher in the organization.) Then I got a response from the billing department saying that since I canceled on February 27, they had the right to renew my domain on February 1.
I wrote back, explaining that I had canceled on December 27, not February 27, and enclosed a copy of their confirmation email. They then said that although I had canceled in December, I had chosen for the cancellation to become effective on Februrary 27.
The cancellation confirmation email does not say which date the cancellation is for, but why would I choose to pay for a one-year renewal with cancellation 27 days later? Besides; even if the package was not canceled, I had still turned off automatic renewal of the domain.
A Google search for the terms "1and1 fraud" or "1and1 scam" lists many people in the exact same situation as me. For example:
From what I can read, the only way to get 1and1 to cancel an incorrect bill is to report them to the Attorney General of the state of Pennsylvania, so that is what I am going to do next.