Web Hosting Firm Overcharges 600,000 Domain Users $7.5 Million

San Francisco, CA (AHN) - Los Angeles-based web hosting firm DreamHost made a major billing mistake on Tuesday charging its 600,000 customers up to $7.5 million for the whole year. The company immediately rectified the mistake and refunded domain users hundreds or thousands of dollars charged to their credit card account, including penalty fees incurred.

InforWorld.com, citing DreamHost's explanation posted in its official blogsite, reported on Tuesday that the company mistakenly set its automatic billing system for overdue 2007 accounts to the current year.

The company has yet to issue any press statement regarding the overbilling.

DreamHost's computerized system also automatically suspended the domain accounts of customers who have not yet signed up for the automated billing. The firm has yet to restore the suspended domain accounts as it was reportedly tied up with returning the $7.5 million temporarily borrowed from its owners.

Customers affected by the error were in an uproar as they went beyond their credit card limit that resulted in bank penalty fees and locking up of their plastics.