sorry to say, paying these people only legitimize their existance online (at least to them!)
you most definately should report this incident to at least your ISP, and then to your local police department. since you received no "service or product" you should be refunded, at the very least.
fraud or no, your money was taken and you received nothing but a few "form-letter" e-mails.
get your money back! then get yourself an e-mail account which has filters!
I canned my Hotmail and Yahoo accounts and traded them for an account with
Blackcode.com. I've enjoyed spam-free e-mail since then.
~Branson