I was able to make these creeps back off and I will tell you how I did it. I was lucky. I had several domain names registered with them last year. At the end of December, I knew my renewals were coming up and I decided to transfer the domains to another company. I was able to transfer all the domains without a problem. That's when the trouble started. Two months later, a new year had begun, and got an email from 1and1 saying that they had tried to renew my domains and had failed because they could not get my credit card to go through.
This was odd, since the domain registrations were paid up until two months AFTER I transferred them out, and I had renewed these domains AFTER I had transferred them from 1and1, and the domains were renewed AFTER they were registered with another company. Fortunately I keep good records and I had proof that I had transferred the domains before the end of the year and I also had proof that the domains were all paid for and I had renewed the domains AFTER the first of the year, and with the new company.
Armed with this info, I called 1and1. The guy that answered the phone insisted that 1and1 had an automatic renewal policy and I needed to give him my credit card number. I refused, and told him that I did not owe them any money. He did not believe me. I asked him to look at his own records and see if my domains had been transferred. He looked, and HE CONFIRMED that the domains had been transferred before the end of the year! But, he said, that did not matter because I had a "contract" to renew the domains with him. He insisted that I give him my credit card. I laughed and hung up the phone.
Two weeks later, I get another message that says my account has gone to collections! I called the collection company (apparently 1and1 owns their own collection company, what a surprise) and asked them exactly what they were trying to collect. They told me that they had received an account from 1and1 and that I owed the money. I told them that they were engaged in fraud and that if they did not cancel the collection action within three days and notify me in writing, that I would take legal action against them. They hung up on me.
A week later, I called the collection agency back. Same story, I owed them money and if I did not pay my credit would be ruined, blah blah blah. I hung up on them.
I then got all my facts together in writing, including screenshots of my domains and when they were registered at the new provider, the credit card data that I had paid the new provider for the renewals, and the screenshot I had taken of my domains right before I transferred them out of 1and1.
Then I wrote a letter to The Attorney General of the State of Pennsylvania. I kept the letter very businesslike, no grumbling, and I suggested that I thought that 1and1 and their collection agency might (MIGHT) be engaged in fraud.
Less than a week later, I got a letter back from the Attorney General saying that she was on the case and had contacted 1and1 and the collection agency.
I called the collection agency back and asked them for the status of the account and if they still wanted to try and collect money from me.
They said the account had been closed.
I called 1and1 and asked the same question, and they said there was no balance due on my account.
It was magical! One day they claim I owe them money and send their claim to a collection agency, and one week after I contact the Attorney General of Pennsylvania, everything is fine.
So my suggestion to anyone that has been ripped off by these scoundrels is to simply write a nice pleasant letter to the Attorney General of the State of Pennsylvania.