Bastards! I assume you both know far better what to do about this, but is it worth going to the financial ombudsman? A few years ago, we received a 'final demand' from Orange for full payment of 12 months worth of a mobile contract which we'd never agreed to. Some little harlot had taken it upon herself to set up a contract without us agreeing to it. They never sent any paperwork out, we never had any account details - it was the first we had heard of it. Long story short, we went to CICAS and received £400 compensation pretty quickly.
Good luck!