Advice sought re. incorrect advice

Hope someone out there will be able to offer some advice on the following problem:

My mobile screen suddenly went blank whilst at work. Phone barely six months old and currently under 18mth contract. Took it into 3 Store and they sent it away for repair. I first had to sign a form which, amongst a load of small print, simply stated that under certain conditions a £19.99 fee might be charged. No further information was supplied as regards what exactly these certain conditions were.

Two days later I recieved a phone message informing me that the phone had been damaged due to liquid ingress and the cost of repair would be £74.99! A number was left for me to call. I felt it odd that liquid damage should have caused the phone to suddenly malfunction as I only use it in an office and car enviroment. Anyway, I contacted the call centre immediately and said I wasn't happy with the diagnosis. I requested they return the phone to me, without carrying out any repairs, so that I could take it elewhere for a second opinion. They went on to tell me that because I had chosen not to have the phone repaired, I would have to pay £19.99 for admin fees ie to cover cost of checking it, postage etc. I expressed my dissatisfaction with this, saying no-on in the 3 Store had advised me of this admin fee when I'd left the phone with them. They replied there was nothing they could do about this. I then asked them about the options available to me. Was told.....

a) I could upgrade, whilst taking out another contract (didn't want to upgrade as phone only 6mths old and I liked it).
b) I could pay £74.99 for the repair (didn't want to pay this as I was yet to be convinced of liquid damage plus I felt that even if this damage was correct the repair fee was too costly).
c) I could pay the £19.99 admin fee to have the phone returned to me, unrepaired.

I informed them I was deeply unhappy with the requested admin fee as I had not been given this information earlier. Said I would complain in store the following day before getting back to them with my decision. An hour or so later, the call-centre contacted me and said they would be willing to carry out the repair for half the given price. I remained unhappy with the whole scenario and said I still wanted to complain in-store before making a decision.

Called at 3 Store the following day. Explained that I was unhappy with several aspects ie. had not been told about admin fee should I decide not to carry out repair and have phone returned to me / was not convinced about diagnosis of liquid damage / disatisfied with a massive £74.99 repair fee. Said I wanted my phone back, unrepaired, and requested they waive the admin fee as they'd failed to inform me of this. They replied there was nothing they could do and advised me to take my complaint to Ofcom! Needing my phone back quickly for work, I was left with little option at that point but to contact the call centre and authorize them to carry out the repair. Was not a happy bunny!

The very next day I recieved a letter from the repair centre, dated the day after I'd left my phone in the 3 Store, informing me of the diagnosis and the options available to me. These options were: a)upgrade to new phone and new contract b)repair at cost c)claim on my own household insurance. It then went on to tell me that should they not hear from me within 14 days of the letter date they would be entitled to charge me an admin fee of £19.99

At no point was I ever told, either by the call centre or the 3 Store, that this fee would only be payable should I not contact them within 14 days of date of letter (even now its only seven days after the date of the letter). I'd simply been told repeatedly that if I wanted my phone back I would have to pay this fee. I wasn't even made aware that I would recieve a letter. Where on earth do I stand now that I've been misled into authorizing them to carry out the repair? I really need to get my phone back quickly as I use it for work, including in the car when I'm on-call. The courtesy phone they've provided me with does not have blue tooth and so I'm struggling (they're aware of this but say its the only phone currently available).

I'm going to call into the 3 Store to discuss this in a couple of days time so would be really grateful if someone could offer me advice.

Have been into 3 Store to complain to manager. No joy. He simply said there was nothing he could do.....he went on to say that because the phone was just over six months old and because it was found to have water damage it would not be covered by warranty. I'm absolutely certain it hasn't suffered water damage (I'm a doctor and only use it in a clinical area and in car when on call). There's no water, liquids or excessive moisture in these areas. He also informed me that it was my lucky day in that the repair centre had said they'd repair it for £37 instead of their original quote of £74. As for the £19.99 admin fee just to get the phone back and which I wasn't clearly informed about when I left it in for repair, he said it was my responsibility to have found out more. It was not for them to go into detail! How come the law allows them to practice like this (or does it)? It sure makes a mockery of informed consent.

Thanks for the reply, Chutzpah. Have been up to my neck in work* just recently and so haven't had the time to explore further. I intend, however, to contact Consumer Direct as you suggest. There's something decidedly unsavoury going on at 3. Like yourself, I find their plan costs excellent but this latest experience has really tarnished the opinion I have of them. There's no two doubts......I was definately misled into making the decision to allow them to repair phone. Additionally, I remain unconvinced of the "water damage" fault.