A man hit with a shock £10,500 bill for exceeding his dongle's data allowance has won a partial reprieve from the Ombudsman after MoneySavingExpert.com highlighted his case.

Vodafone customer Stephen Utting (pictured below) unwittingly racked up the life-changing bill on his dongle because he mistakenly believed that its data usage was capped and says he was not alerted once his monthly allowance was reached.

The telecoms provider denied it ever offered him a cap and insisted he was sent 12 notifications to warn him he'd exceeded his limit.

Stephen referred the case to Ombudsman Services, which sided with his version of events and found that Vodafone "did agree to cap the data on your dongle account and that it failed to send usage notifications as set out in its terms and conditions".

The Ombudsman's investigation also identified "technical issues" which affected Stephen's ability to log in to his Vodafone account and view his usage there.

Vodafone has been ordered to cut his bill by 75%, leaving him liable to pay £2,600 because it found "both parties should share some responsibility for the data charges that have accrued". Vodafone has also been advised to write him a letter of apology.

However, both parties have appealed the Ombudsman's ruling, with Stephen calling for the whole bill to be waived, and arguing that he was mis-sold a product with a data allowance which didn't meet his needs.

MoneySavingExpert.com has contacted Vodafone to find out the basis of its own challenge, and we'll update this story when we hear back. A final decision from the Ombudsman is expected next month.

For full help in choosing a Wi-Fi dongle, plus what to watch out for, see our Mobile Broadband guide.

How Stephen ran up a huge bill

In the mistaken belief that his usage was capped, Stephen allowed others to log in to the dongle and use his data over a period of several months, with one colleague using it to stream multiple programmes online.

It's still not clear exactly how the confusion around data capping arose - but what is clear is that Stephen's dongle offered a modest 2GB of data for £20/month, the dongle wasn't actually capped and Vodafone's out-of-allowance data charges were eye-watering.

The provider charged £6.50 for every 250MB used outside his allowance - which meant that simply streaming an HD film through the device could cost well in excess of £100.

One oddity thrown up by Stephen's case is that, in some circumstances, UK customers are better protected by this kind of 'bill shock' when roaming on holiday in Spain, the US or even China than they are at home.

That's because if you use a dongle from any UK provider – including Vodafone – abroad, you're protected by a data-roaming cap of €50 (about £43) per month – unless you opt out or have agreed to a different limit with your operator. You'll also receive a warning when you reach 80% of this agreed limit.

In stark contrast, there's no standardised cap for dongle usage in the UK, and it's this disparity which saw Stephen rack up such a huge bill.