You already know what I think about the phone, so I definitely think you're doing the right thing. It's not vindictive at all, and it's not punishing her. In any event, her bad choices are punishment enough. The day she wakes up and realizes where the path she has taken has led is going to be a very sad day, for her.
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its not really the money i care about its her hurting me with out any consequences.
There are always consequences to hurting someone, and you don't have to worry about applying them yourself. Sorry about all my quotes, but here's one that I think applies:
"Through the law of karma, the effects of all deeds actively create past, present, and future experiences, thus making one responsible for one's own life, and the pain and joy it brings to oneself and others."
It is in the shelter of each other that people live.--Irish proverb