how was your orange contract agreed? did you sign to say you agree to the contact ? or was it agreed over the phone . I had this trouble with 3 they sent me a "first monthly bill" for a phone and contact i had supposidly agreed to ! they said that i had agreed to a contract with them over the phone when i didnt ! I asked them to send me proof of my new contract which they couldnt (as i hadnt got one!!!).

FEW IDEAS . . .its strange that orange do not offer the 14 day guarentee most companies do- it may be worth checking this in your welcome pack even if the person on the phone said you didnt have one or it may be worth phoning and asking again.

you say thay you asked about "IF" you went ahead with the contract - how did you arrive at doing so?

Possibly look into reducing the o2 contract to the minimum to reduce costs ? or would your partner (for example) be able to make use of the orange contract if you are stuck in a contract.

I personally would write a complaint letter to the store explaining how misleading the person in question was and explaining the outcome. Explain how you were "assured that the £200 cashback would buy you out of your O2 contract" stressing the fact that you now have to pay for two contracts - see where that gets you