Hi Sarah,
First question to ask in my opinion is if your publication is delivered to all business premises in the the area, how come I've never got one?
Seriously, though, we all have to advertise/market our services, so unless you have actually heard of the mag, I would steer clear, sounds like you have no option but to pay this time, as you agreed to the advertising, but learnt your lesson. there are many companies out there who specialise in this sort of thing, we get them all the time.
Regards,
Rob