Service Repair

When listening to my ipod, if the headphones move slightly, the sound is either lost or only out of one earbud. The screen is also badly scratched, but I know that isn't covered in the warranty.

So I went to set up a online service repair, and selected that if the service was out of warranty (which it isnt) that I would prefer my ipod just sent back without service.

All was fine, but eventually I got to a "quote" page, that asked for credit card info, and said I would be charged $150.00.
What the heck!? I thought service was free if your ipod was in warranty.