Microsoft to repay overcharged MSN subscribers

Ben Berkowitz

LOS ANGELES: Microsoft Corp. has agreed to pay $100,000 in fines and offer

refunds to Internet users in southern California who had trouble canceling MSN

accounts because the software giant had mismatched their credit card numbers,

prosecutors said on Tuesday.

The Orange County district attorney's office filed suit against Microsoft

after consumers complained that they were unable to cancel their MSN accounts

because their credit card number on file did not match the number being billed.

In many cases, the billing credit card number had changed for legitimate

reasons, including an upgrade by the credit card provider, prosecutors said. But

such changes were not always reflected in MSN's files, leaving MSN subscribers

billed for Internet access they never used as they cleared up the matter with

their banks, prosecutors said.

Under the terms of the settlement, Microsoft will establish a procedure to

refer customers with the same problem to a supervisor for resolution. The

company will also pay restitution to affected subscribers and $100,000 in civil

penalties, which also covers the litigation costs.

The settlement requires Redmond, Washington-based Microsoft to pay

restitution to customers who can prove they were affected by the billing problem

any time after March 1998, Deputy District Attorney Andrea Burke said.

Burke said Microsoft must file a declaration with the district attorney's

office in six months listing who was repaid and how much. She said the

restitution could take the form of free access to the MSN Internet service or

reimbursement for overcharges.

Burke did not know how many people were affected by the billing problem but

said her office had received about two dozen complaints from affected customers.

One of the main features of Microsoft's upcoming .NET Web services is

expected to be one-point shopping, where customers can provide their credit card

details one time and then use a universal login on a range of sites to pay for

products and services.

The company's MSN Internet service ranks as the second-largest Internet

service provider behind AOL, a unit of AOL Time Warner Inc. A Microsoft

spokesman said the company had already addressed customers affected by the

billing problem and said the company expected its restitution payout to be

negligible.

"We expect that number to be zero or somewhere around that," he

said. He also said the customer-service changes mandated by the settlement have

already been made.