Merchant One Scam, Internet

We began using Merchant One as a merchant account provider mid January of 2011. We used the service one time in that same month. We discovered several month ago that we our bank account was being debited almost $50 a month for a service we did not use. We contacted Merchant One to ask them to cancel the account and they said we had to pay an additional $200 to close the account. They said we had signed a two year contract. After asking them for a copy of the contract, they emailed a contract that with a clearly forged signature.... Even after pointing that out, they still refused to cancel.