Police are investigating an alleged driver licence fraud case at an Auckland Automobile Association station and the NZ Transport Agency was auditing its driver licensing regime.
One News reported a booking agent had been suspended and was being investigated by police for allegedly selling driver licences to unqualified drivers for $500 each.
The booking agent has denied the allegations.
One News said while no charges had yet been laid, the agent could have been manipulating the AA system since January last year and it was unknown how many drivers' licenses were involved.
A Counties Manukau police spokeswoman confirmed police were investigating allegations of fraud involving the issuing of driver licences.
The spokeswoman said no further comments would be made at this stage in the investigation.
The NZ Transport Agency was also undertaking an audit of its driver licensing systems.
Associate Transport Minister Craig Foss said it was being taken very seriously and the police were involved.
It was too early to know how many unqualified drivers were using the licenses or whether it went further than the allegations against the agent.
"The Transport Agency is assisting the police investigation and taking immediate steps to protect the integrity of the driver licensing system. The public needs to have trust and confidence in that system."
He said it was inappropriate to comment on the specific allegations because of the active police investigation.
Fergus Gammie, the chief executive of the Transport Agency, said it was co-operating with police and immediate action would be taken over any licences found to have been inappropriately issued.
NZTA had also started an audit of the entire driver licensing system to assess what measures were needed to reduce the likelihood of future breaches.
"The integrity of that system is vital because we need to ensure that everyone who holds a New Zealand licence has earned it by demonstrating the ability to drive safely. The public needs to have trust and confidence in the driver licensing system."