A subsidiary of EarthLink Inc. will pay a $20,000 settlement to the State of New York and will give refunds to customers in the state who were billed "excessive amounts in undisclosed charges," Attorney General Andrew Cuomo's office reported Monday.

The company in question is PeoplePC, which has slightly more than 50,000 subscribers in New York state.

An investigation found that while PeoplePC advertised its dial-up Internet service as unlimited and low-cost, offering local telephone connections to access the Internet at prices as low as "$5.47 per month for the first 3 months," several consumers incurred more than $500 in undisclosed long-distance charges while using the service.

Cuomo's office said the EarthLink unit claimed in its own advertisements, and those on the AARP Web site, to provide fast, easy connection in one click through its "Smart Dialer" service. The program would sometimes select non-local telephone numbers, however, subjecting customers to pricey by-the-minute access charges - a practice the company failed to disclose.

PeoplePC has agreed to clearly disclose any hidden charges consumers may incur in addition to the advertised monthly rate; provide refunds to customers across New York who incurred long-distance charges when using access numbers suggested by PeoplePC; and pay New York $20,000 in penalties.

PeoplePC has 1.6 million subscribers in the United States.