InPhonic, Wirefly ripoff fraudulent charges on returned items and phone service never recieved Internet

I was lead to believe that I had won a free phone. Upon recieving the phone I also recieved information about the service provider. I was originally under the influence that I was recieving a phone and thought that I could add it to my current cell phone service. The service provider for the phone does not provide good coverage in my area, so I was not interested.

I contacted InPhonic about returning the phone. I was told that it would be no problem and no charges for the service would be expected, since I never activated the service. I followed the return process, tracked it until they had recieved the package, and contacted InPhonic to verify that they had recieved their "free" phone.

After confirming that they had, the InPhonic Representative let me know that I would be recieving the paperwork, on the phone service, and that I would need to call them back upon reciept of this, to cancel. I recieved the service papers, opened them, to get any information the InPhonic representative might need.

Upon inspection I noticed that I was declined for service through the provider, based on my credit scores. I called back to the previous operator and she said she had cancelled the service and that no charges would be expected from me. Why am I expected to pay $250.00 for a phone service contract that I never activated or for that matter, that I was turned down from having based upon my credit history. Is there anything that can be done to have this charge erased and removed from my credit?

Steven
Burnet, Texas
U.S.A.