FinTel customers urged to claim settlement

Ritchie Hutton, head of investigations for the Commerce Commission, is urging Fintel customers to get in touch with their insurer as they may be owed a refund. Photo/Supplied.

FinTel customers with multiple insurance policies are being urged to come forward after Tower reached a settlement agreement with the Commerce Commission.

Tower, which is the underwriter for FinTel's policies, has agreed to refund $25 per year or part-year to affected FinTel customers who had multiple policies with FinTel between July 2003 and October 2014.

The agreement is part of a settlement reached between Tower and the commission after
the insurer discovered it had miscalculated multi-policy discounts owed to some customers because of a software fault and IT system changes.

It reported itself to the commission in May 2016.

Since then it had refunded 96 per cent of the nearly 24,000 customers overcharged between October 2014 and September 2016, including FinTel, Kiwibank and TSB customers with policies underwritten by Tower.

The company said less than 10 per cent of its customers had been affected.

But a spokesman for Tower said it had been unable to identify some FinTel customers who may still be entitled to a refund.

"These customers are encouraged to contact FinTel to confirm their eligibility to receive a refund."

FinTel customers can confirm their eligibility by registering their details online or over the phone prior to January 16, 2018.

As part of the settlement Tower will also pay around $75,000 to the Citizens Advice Bureau - an amount that may differ depending on how many more people come forward to claim a refund.

Ritchie Hutton, the commission's head of investigations, said it 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.

"The payment to the CAB was appropriate to avoid Tower receiving a windfall from the miscalculations."

A spokesman for the commission said Tower suggested the CAB as a worthy recipient of the funds and it agreed.

The $75,000 was an estimate of the detriment to FinTel customers over the 11 year period.

"The amount received by the CAB may rise or fall depending on how many FinTel and Tower/TSB/Kiwibank customers come forward in the next three months."

The settlement agreement includes:
• fixing the software that created the miscalculation, which Tower has now done

• recalculating 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

• refunding $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

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