Microsoft's MSN Overbilled Thousands (09/15/00, 7:28 p.m. ET) By Reuters SEATTLE -- Microsoft Corp.'s Internet service, MSN, said Friday it had inadvertently overbilled new subscribers by hundreds of thousands of dollars.

A test of a new billing system caused a credit clearinghouse to place holds on personal funds of at least 1,000 of MSN's 3 million customers, in some cases resulting in bounced checks and other inconveniences, a spokeswoman said.

"We've been contacted by about 1,000 customers and that's an early number," said spokeswoman Kathy Gill, adding that the amount of overcharging appears to be about $500 per instance.

The problem was reported by MSNBC, a joint venture between Microsoft (stock: MSFT), Redmond, Wash., and General Electric Co. (stock: GE) unit NBC television, New York.

On its website, MSNBC cited a new MSN customer charged $500 for a scanning device MSN offers free with a three-year subscription to the service, which costs $21.95 a month. According to MSNBC, some people were charged up to $2,000.

MSN, which never received any of the overcharged funds, will give affected customers a month's free Internet service and reimburse them for any bank fees or other costs related to the problem, Gill said.

MSN was also working on a letter advising customers of the problem.

MSN has been involved in an aggressive campaign to enlist new users in its battle with America Online Inc. (stock: AOL), Dulles, Va., and Yahoo Inc. (stock: YHOO), Santa Clara, Calif.

In recent months, MSN has launched a new brand campaign. It has forged partnerships with retail establishments and computer makers, all in a strong push to attract new customers.

In part of the campaign, MSN subscriptions have been offered through large shopping malls and electronics retailers such as RadioShack and Best Buy.

http://www.techweb.com/wire/story/reuters/REU20000915S0005

-- Martin Thompson (mthom1927@aol.com), September 15, 2000