Apple customer care illegal took more money off of my credit card??????????

After hours and days on the phone to my service provider Orange UK (my iphone4 is three months old) they accepted there was a fault with the phone and put me directly through to Apple I was quite bewildered what was going on.
Orange told me Apple will now send you a new phone!
Now talking to Apple.
They told me I would have to travel to my local shop 45 miles away or have the phone picked up for repair and would not supply a replacement phone. The phone would be away for possibly 10 days or more for repair when I explained this was was not good enough as I need a phone for work.
They turned round and said that they could offer me a service, the phone would be picked up and replaced with a recon iPhone4 within the next three working days (no defined time or day could be given just in those 3 days) and a deposit of £480 payable immediately over the phone, this would be reimbursed several days later when they were happy that my phone was not smashed or water damage when they received it.
I didn't have any choice, I have to go for this option.
I did a card transaction over the phone and was told that it would be for £280 they actually took £499 as I checked with the bank a few hours later this is classed as illegal transaction fraud, theft or any illegal act.
I'm writing this four hours after making this payment to Apple
This is how Orange really deals with iPhones?
Is this really how Apple customer care operates?
Can anyone help me with this palaver?
Mark

Hi Thanks I've spoken to the bigwigs! Good customer liaison the chap I spoke to in the end after getting patched back from the States.
Apparently I was told the wrong cost as everyone sayed and because my credit card is actually a debit card the money is removed from my account and yes it will be reimbursed fully once they're satisfied with my return phone.
Strangely enough UPS just turned up as I was writing this with the exchange phone.
Apparently the Apple chap told me yesterday this will be the replacement phone I keep, my old one will be refurbished and put back into the system.
Thank you for the great replies it was really reassuring and helped calm the situation.
Have a great day Mark

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