In addition - seems interesting that they can block his account and then demand the whole subscription fee, they have also an obligation to deliver the service (admittedly this is a weak argument).
For example on the one hand you're threatened with massive fines if you pirate stuff, but on the other hand you pay GEMA and such on virtually everything you do online to compensate the people you're supposedly pirating anyway, whereas no real artists you've ever met admits to having ever seen any of that money.
Well, I guess the scam artists at SONY are also a type of artist.
Meanwhile you can go to the cinema and
- first there is a notice to turn off your phones (fair enough)
- then there is a notice saying that if you use your smartphone, you will get fined, imprisoned and sent to Siberia. What exactly are the uses of a turned off smart phone that can warrant that?
- meanwhile the cinema has a CCTV system that doesn't seem to bother the copyright people one bit, although feeds form such systems have already appeared on bittorent (or so I am told). So the real problem is obviously not the pirating as such but the customer being enemy number one.
Definitely don't pay any of the added "Mahngebühren" etc. If you do decide to pay, then the most you need to pay is the original sum that was owed, plus interest at 5%.
Since this is a civil matter for a relatively small amount I'm not sure if it would be enforced by CH - my gut feeling is a "no, not worth it for any foreign actor".
With that said I'd still try to reach an agreement, especially if the company was in my favorite holiday country called USA or within the EU - otherwise the debt may bite you big time later on. After all, OP signed a contract, it's his own fault he failed to read it and never cancelled.