Eircom has been left red-faced after billing more than 10,000 customers with a new charge before notifying them of it.

Putting the error right is likely to cost the phone company considerably more than the money it was intended to raise.

The foul-up occurred after Eircom decided to introduce an administrative fee on its charge card service. The charge cards enable people travelling abroad or otherwise away from a convenient phone to bill their own account from any phone by using a personal identity number (PIN).

Customers first became aware of the mix-up when they saw an unexplained charge for "Eircom charge card" appearing on their credit card statements. The charge is just 50 cents plus VAT, a total of 60.5 cents.

An Eircom spokeswoman yesterday apologised to customers and said the money would be refunded. "We made an administrative error and started to bill for this new charge before notifying customers," she acknowledged. She said Eircom had billed about 10,060 customers, most of whom pay their bills by credit card.

On Eircom's numbers, the charge would raise a maximum of €5,030, assuming customers do not quit the service. Given that Eircom says the fee can be offset against call charges on the card, the costs involved in processing bills twice along with one refund will match any budgeted gain.

Part of the problem lies in the fact that many customers listed on Eircom's record of charge-card customers no longer use the service. It has become less critical to customers following the surge in the number of mobile phones in use in recent years.

Because there was no charge until now, customers did not need to contact the company when they stopped using it.

One customer who spoke to The Irish Times yesterday said he had not used the card since 1996. The first he knew of the charge was when it appeared on his credit card statement.

"I was astounded when I saw it," he said. "I have not used the service in years and, as far as I can remember, threw the card away long ago. It's not that I care about the amount, which is insignificant really. It's the idea that it was there at all."

He said his credit card's customer services department told him when he rang to query the statement that they had received "hundreds" of calls over the charge.

A spokeswoman for Bank of Ireland said there had been some complaints, but it was really an issue for Eircom.

The Eircom spokeswoman said the fee was an account charge and customers would pay only once regardless of the number of cards in the household, as long as all were being charged to the same number.

She said customers would now be notified and would have the opportunity to leave the service before the charge was introduced.