Billed for a contract I do not have.

I did an online application with Mondo but when the phone arrived, it was not the package I signed up for so I cancelled the contract with them within the cooling-off period and returned the phone to an MTN store as requested. I was then billed at the end of the month for this contract. When I queried this, I was told that they can see that it was cancelled within the cooling off period and all the necessary steps were followed from my side but there is a delay on their side and the warehouse has not yet received the returned phone (this was almost 3 weeks later). I did a follow-up call with them this morning (3 weeks after my last call) and it still has not been returned to the warehouse even though the matter was supposed to be escalated after my last call. The attitude of the customer service consultant was that I would have to wait for them to deal with their backlog and have my account debited until they were able to sort it out. Why am I responsible to pay for a contract that I never had? Why am I held accountable for the incompetencies on their side? I would like this issue to be resolved before the next debit order is due!