Upvote:3
EDIT: The answer below may not be entirely correct. It's probably still a good approach and is not going to do any harm, but I just took a look at the actual law https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32004R0261 and it seems like the "operating carrier" is on the hook, not the "marketing carrier". So Condor may have been correct in stating that you talk to Lufthansa. This makes not a lot of sense from the passenger's perspective, since the "marketing carrier" took your money, but that appears to be the way the law is written.
ORIGINAL ANSWER
You may have to prepare for a fight here. Document everything with date and time, screen shots, receipts, etc.
Write them a certified letter, where you state.
It would help to have a lawyer write this, but it's also perfectly fine if you write it yourself. If you have a friend with some basic legal experience they can perhaps look it over.
Chances are they are just trying to scare you into paying and the more forceful you come back, the more likely they are to back off.