Tower refunding 23,000 customers

A technical error meant 23,000 customers were overcharged by the insurance company.

Tower Insurance is refunding 23,000 customers after it overcharged them on policies.

The company sent out letters to affected customers saying a technical issue meant some multi-policy discounts were miscalculated.

The company apologised for the error and said the refund would be credited to their account within five working days.

The company wouldn't confirm the total amount owed, but a spokesperson said the issue was addressed immediately.

"This week we advised some of our customers that they will be receiving a refund after identifying an error in calculating their multi-policy discounts," the spokesperson said.

"The error occurred due to a technical issue and we moved to correct it as soon as it was identified. Approximately 23,000 customers have been affected by this error and those who are due a refund will receive this over the coming days."

Less than 10 per cent of Tower customers have been affected by the issue, which relates to customers with multiple policies renewed between October 1 2014 and August 31 2016.

"We calculated your package discount incorrectly," Tower said in its letter to customers.

"This is due to technical issues that impacted some Tower Insurance, FinTel, Kiwibank and TSB customers who had multiple policies with us."

Tower informed the Financial Markets Authority and the Commerce Commission of the issue and had been keeping them informed of the progress in resolving it.

The company has also retained financial consultancy firm EY to audit its processes and ensure this was set right.

Customers can visit tower.co.nz/refund for further information.