Don't worry, nothing is wrong. It is so easy to say this sitting in your office. If this happened to me I would be freaking out. My phone certainly doesn't work outside the USA and I am happy about this other than if this happened to me.
This is the poster child for booking a hotel directly rather than not using a 3rd party booking site and skipping booking someone's private house. This stuff happens all the time on booking, airbnb, homeaway, etc.
WTF: "Booking.com has since refunded the cost of the non-existent villa, with a deduction of £80, but the Loaders' ordeal didn't end there. The family's additional expenses for new lodgings, international phone calls, and unforeseen travel costs were not compensated. " Why 80? Why not the additional expenses. Not to mention the company thinks this family's time and stress is free when it isn't. Time to hunt down the booking office