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That seems perfectly reasonable. The retailer was up front with you saying they could supply the airtime contract for the dongle but only if you also took out the phone contract. Just because other retailers offer the same contracts separately doesn't mean that the shop you bought them from...

I don't understand what the problem is. Is the total £22 per month 50% more than your current contract? If so isn't that what you agreed to? There will be two contracts - one for the phone and one for the airtime/data. Just because they are separate contracts does't mean that you can get one...