Recommended NZ | Guide to Money | Gimme: Competitions - Giveaways

Cash for Citizens Advice Bureau in settlement with Tower

Contributor:
Fuseworks Media
Fuseworks Media

The Citizens Advice Bureau will receive approximately $75,000 as part of a settlement agreed between the Commerce Commission and Tower Insurance (Tower).

Tower overcharged some of its customers by failing to properly apply multi-policy discounts. It offers a discount when customers hold more than one eligible insurance policy for car, house, contents or a boat. The total discount varies depending on the number and type of policies a customer holds.

Tower has already refunded 96% of the nearly 24,000 customers overcharged between October 2014 and September 2016, including FinTel, Kiwibank and TSB customers with policies underwritten by Tower, and it has a process for those customers not yet found. It has now agreed to offer refunds to customers of the FinTel brand who may have been overcharged prior to this period

"If you were a FinTel customer between July 2003 and August 2014 with more than one policy, we urge you to contact Tower, because you may be eligible for a refund. There may also be some more Tower customers who are still owed a refund," said Ritchie Hutton, the Commission’s Head of Investigations.

Tower reported itself to the Commission in May 2016 after discovering that it had miscalculated multi-policy discounts owed to some customers because of a software fault and IT system changes.

Tower says that fewer than 10% of its customers were affected. Some customers received discounts that were too high as a result of the miscalculations, and Tower will forgo recovery of the undercharged premiums.

In the Commission’s view Tower breached the Fair Trading Act by making false representations to customers about the amount they were required to pay for insurance, by not accurately applying the discount. The Commission has now reached a settlement agreement with Tower where it agrees to: fix the software that created the miscalculation, which Tower has now done

recalculate multi-policy discounts and refund affected customers who overpaid $5 or more for insurance between October 2014 and September 2016, which Tower has also now done

refund $25 per year or part-year to affected FinTel customers who come forward within the next three months, and who had multiple policies with FinTel between July 2003 and August 2014

make a payment of approximately- $75,000 to the Citizens Advice Bureau (CAB).

"The Commission accepted Tower’s submission that the cost of calculating refunds due to FinTel customers affected prior to August 2014 was onerous and disproportionate to the likely refund owed, and the payment to the CAB was appropriate to avoid Tower receiving a windfall from the miscalculations" said Mr Hutton.

All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us through our contact form if you believe an item on this site breaches our community guidelines.

Personal Finance guides from guide2.co.nz

The latest money guides from authoritative New Zealand sources: Investing, KiwiSaver & Saving, Managing Money, Home Loans, Credit Cards, Tax.

Links will take you to guide2.co.nz.

Connect with Voxy

Voxy on Google Plus     Join Voxy on Google+.

 

Credit Card Comparison TablesCompare Credit Cards - Interest rate and fees comparisons for New Zealand banks.