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Software giant Microsoft Corp.'s Internet service, MSN, said 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.

On its Web site, 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.

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