A major insurance company is being taken to court by the Financial Markets Authority (FMA) for allegedly misleading customers.
The FMA have filed High Court proceedings against Vero, claiming the company failed to apply multi-policy discounts that customers were entitled to "which led to affected customers being overcharged approximately $8.7 million in premiums".
The authority say the issue affected around 47,000 Vero customers between April 2014 and May 2022.
"The false and/or misleading statements were made in periodic invoices issued to affected customers in relation to house and contents, vehicle and boat insurance," the FMA said in a statement.
The authority add their belief that "Vero failed to apply the discounts due to errors and deficiencies in its systems, including data entry errors by Vero employees and some intermediaries", but say liability rests with Vero as it designed, owned and maintained the systems.
"The FMA understands Vero has reimbursed $10,259,000 in overcharges to affected policyholders."
Vero itself reported the issue to the FMA in December 2019, having already been reviewing the matter for several months, but the FMA requested a full investigation and say Vero then discovered more affected customers than previously thought.
FMA's head of enforcement Margot Gatland said the company needed to be faster to investigate the issue.
"The scale of customer harm caused by Vero’s system failures is significant," she said. "Vero was aware from 2010 that there were issues with its systems but failed to adequately recognise their magnitude."
In response Vero said it has "stopped the issue occurring and been working proactively with its intermediaries to fully reimburse both past and present customers for any discount they were due".
"To date, the vast majority of customers impacted by this error have been remediated and apologised to."
Vero CEO Jimmy Higgins added that any negative impact on customers is unacceptable.
"Our priority has been to make it right for customers, and we have been working hard to contact anyone impacted, whether they still have a policy with us or not," he said.
"We remain focused on fixing any issues we find as quickly as possible and continue to look for ways we can deliver great outcomes for customers."
The FMA acknowledged in their statement that Vero have been cooperative throughout the investigation.
The authority wants a declaration that Vero contravened the FMC Act and for the company to be fined.
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