Virgin Mobile complaints procedure

We were so pleased to have moved to Virgin mobile just two months ago but the microphone stopped working, Hubby could hear me but no-one could hear him. It took us ages online to find out how to return it. We managed and were told to return the phone. We received a sturdy box and bubble wrap and returned the phone. We had an email to say it had been received, and waited and waited and waited. We got tired of waiting so rang up to see what was happening. We have been told we caused considerable damage to the phone????????? my husband is nearly 70 and has been spoken to with no respect at all and is so upset... the phonecall has lasted for 47 minutes. Virgin have denied responsibility and have said it will cost us nearly £200 to cancel our contract. They have said they will not repair the phone and will not replace it. He kept asking to speak to a manager but when the manager came on the phone the first thing he said was 'we will not repair the phone and we will not replace it'. Is that really your policy? The manager has said that your company always wins in this situation and that we will receive a letter telling us this. My husband and I are so shaken by this. I am disabled and my husband is my full time carer but now I cannot contact him if he leaves the house. I can honestly say that we have never been treated like this before. We are so shocked and saddened, I have never known of a company treating anyone like this. Does anyone know what on earth we can do?