Pleased your sorted.
But personally, I wouldn't say a thing to him. Just let him stew in his inability to use your connection.

In the mean time, is it possible to ask a pal to drive round with an active laptop, and check if you really are encrypted?
All he /she has to do is turn on their wireless connection, in or outside of your house and see if they can detect a wireless connection.

They should be able to do this, but a password to enter the 'encrypted' network will be asked for.

Best of luck.