Despite proof that they had accepted the cancellation they still refuse to refund the charge and gave the same ultimatum to block my account if I use the bank or small claims court to reverse the charge.
Talk to Citizens Advice - no company can override or seek to override laws that were created explicitly for your protection, so screw them. I hope Sony threatened you in writing. Seek CA's advice, and prepare to go to the Small Claims Court anyway.
I may just get a console to start kicking in their legal windows here - I could have a lot of fun with that.