Osian Rhys Edwards told to pay for huge charges run up by thief in Barcelona after company disputes robbery report was made

A Welsh primary school teacher who had his mobile phone snatched while holidaying in Barcelona is facing financial ruin after being told by Vodafone that he must pay a £15,000 bill run up by the thief who used the phone to make expensive calls throughout the night.

Osian Rhys Edwards called his mobile provider soon after a pickpocket made off with his handset on a Saturday night in early August, but Vodafone has insisted it has no record of his cancelling call, and is now holding him liable for all the calls made before its fraud department cut the phone off.

The 29-year-old, who teaches at a school in Barmouth, on the west coast of Wales, has become the latest victim of the refusal by mobile operators to cap customer bills – despite a 2012 agreement with telecoms regulator Ofcom that they would do so.

Criminal gangs have long targeted tourists in the Catalan capital, stealing their phones late at night, then using the sim card to profit from premium-rate numbers repeatedly dialled throughout the night, until the phone is blocked.

Rhys Edwards says he can’t pay the £15,000 Vodafone bill (which includes £2,500 in VAT), even if he wanted to. He describes the episode as a “nightmare that doesn’t seem to be ending” and says he can’t sleep because of the worry.

He now fears that his plans to move out of his parents’ house and buy his own home will now never happen. A default notice on his credit file following non-payment would end any chances of him getting a mortgage.

Recalling the night of the theft, Edwards says: “We were a bit lost trying to find our way back to our hostel. A young man approached asking if we were lost and kindly gave us directions. Soon afterwards I discovered that my phone had been stolen. I suspect it was the man helping us.”

Knowing thefts are a huge problem in Barcelona, Edwards says he had taken his bank card and Vodafone’s phone emergency numbers with him, and used a local pay phone to report the incident.

He handed over his account details to the Vodafone call handler. But when he returned to the UK, and rang back with his handset (IMEI) number as requested, he was told that Vodafone had no record of him cancelling.

His itemised bill, totalling £15,031.08, shows his sim card was used to make calls to just two Spanish numbers – thought to be charged at premium-rate tariffs – throughout the night. Calls were made at a rate of more than one a minute at a cost of up to £20 a call.

“It’s clear that I have been the victim of fraudsters but Vodafone wants to hold me responsible. I can’t believe that this is allowed to happen. If I’d lost my bank cards, the banks would soon stop them when they spot unusual activity but even though I reported my phone stolen, Vodafone not only says I’m liable, but it is probably making money out this,” he says.

Vodafone, which this week offered to reduce the bill by 30%, leaving him to pay over £10,500, has told the Guardian that any recordings of calls that would have helped his case no longer exist as they would have been wiped after 60 days.

Edwards’s case is almost a carbon copy of that of Sarah Harvey, an NHS worker from Brighton, who’s been told by Vodafone that she must pay the £5,800 bill run up after she was mugged, again in Barcelona, and her phone was snatched.

She wasn’t badly injured and tried to ring Vodafone’s lost and stolen number from local payphones, just after the 1am incident, but says she could not get through.

A Catalan friend reported the theft to local police at 3.50 am. She tried again to contact Vodafone at the airport a few hours later, and finally got through that evening back in the UK. Again Vodafone has insisted that she is liable for all the calls made.

In 2013 Vodafone told recruitment worker Georgia Harris, whose phone was also stolen in Barcelona, that she would have to pay a £21,000 bill, run up as she flew home, although in her case the company later backed down.

Earlier this year Citizens Advice said that last year it dealt with 130,000 consumers seeking advice about unexpectedly high mobile phone bills, which in many cases were driving victims into serious debt. Many other victims have simply paid up, fearing that a negative credit mark will end their chance of mortgage.

A spokeswoman for Vodafone said: “It is very easy for criminals to rapidly build up high charges using stolen phones, which is why we encourage customers to report phones missing as quickly as possible.

“When a customer’s phone is lost or stolen, they are responsible for all the charges up to the point they contact us to report it missing. They, or someone on their behalf, can do this 24 hours a day, 365 days a year – either from another phone or online. Despite not reporting the theft of his phone for four days, we have offered to reduce Mr Edwards’ outstanding charges by 25%.

“In the light of our failure to call him back when we should have done, we will increase this offer to 30%.

“We are also prepared to discuss a payment plan.”

She refused to discuss Harvey’s case on the basis she “could still appeal to the ombudsman”.

How the operators have evaded bill caps

It was 2003 when the Guardian first warned mobile users that a little-known clause in their contract holds them liable for all calls made up until their sim card is reported stolen – yet few people are aware of the risk they take when they take their phone abroad.

The Money section has featured numerous cases of readers pursued for £10,000-plus bills racked up by thieves, often when the owner was unaware their phone was missing.

Victims have repeatedly asked why – when banks only hold customers liable for the first £50 when cards are stolen – the mobile operators are allowed to foist unlimited liability on their customers. A bill cap would ensure any stolen phone could be used up to a pre-agreed limit – say £100 - and then cut off automatically.

Consumers relying on a handset pin fare no better as the sim is simply removed and placed in another handset.

In March 2012, the telecoms regulator Ofcom announced it had given mobile phone companies six months to come up with plans to introduce caps on customers’ monthly bills. However, the companies, through a series of challenges, managed to avoid the request.

They argue that they cannot bar accounts as they don’t have “real time” call monitoring. Critics say they don’t want to pay to upgrade their systems – especially as they already bar out-of-credit, pay-as-you-go phones and monitor data roaming charges in real time.

Ofcom handed the matter over to the government after concluding it couldn’t force caps through. It said it had “raised concerns” with government about the lack of consumer protection. “Our evidence shows that while the proportion of consumers affected is low, the level of financial harm in individual cases can be substantial,” said a spokeswoman.

There appeared to be some progress last December when the Department for Culture, Media and Sport (DCMS) announced that bill caps would be in place by the spring of 2014. However, once again, that date came and went – leading some to assume that the companies’ lawyers and lobbyists had managed to get the matter kicked into the long grass.

A DCMS spokesman refused to give any details and would only say that negotiations “were continuing with the companies”.

Richard Lloyd, executive director at the consumer group Which? said a cap was long overdue and that the government “must bring this in as soon as possible”.

One of the key problems is that consumers with high bills have nowhere to turn. The ombudsman service, to who the phone companies point victims, invariably sides with the provider. It said that it is not in its remit to rule on the legality of forcing customers to pay charges made by the phone’s thief.

Lawyers have suggested these bills could be unenforceable. The Guardian is not aware of anyone being successfully pursued in court by their phone company for a bill racked up by a thief. Non-payment, however, always draws a default notice.