I would assume that you signed contracts for two phones therefore you are in contract for service for two phones.
iPhones are €500+ in cost so there was no way there was a free one on offer with no terms and conditions - do you have copies of the contracts?
All phone contracts with a free or low cost device are based on a monthly subscription which you are tied to for a period, mostly 18/24 months for iPhones.
I think you will need to appeal to the operator that the phone is unused and will be returned directly and that as there has been no calls/texts/data used you were mis-sold it.
However as it is now with the debt collector not the operator it may not be easy to have it changed.