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Are you asking if they can apply the cancellation fee?
No. A cancellation fee is a fine which is contrary to UCTA.
But they do have a claim for lost profits as you are locked into a contract with them and if you leave they are entitled to be put in the position they would have been in if the contract had been properly performed.
I realise that you have complaints with them but they do not amount to terminatory breaches allowing you to cancel.
They won't sue anyway. They will just add a default to your credit file. That may be important or it may not. It depends whether you want to borrow money or use credit in the next six years.
Can I clarify anything for you?