AA Insurance taken to Court for overcharging customers
The Financial Markets Authority (FMA) has filed civil proceedings against AA Insurance for breaches under the Financial Markets Conduct Act (FMCA).
The FMA alleges AA Insurance didn’t apply multi policy discounts, membership discounts, or no claims bonuses correctly to eligible customers. The errors meant AA Insurance overcharged customers by $11.12 million.
This is the seventh case the FMA has brought against insurers for breaches of the FMCA. In all instances, the breaches were made because of system errors and process failures.
Margot Gatland, FMA head of enforcement, said, “While we acknowledge in each case the efforts of companies have made to remediate customers for these issues, the length of time taken to identify and resolve the mistakes in the first place was a key factor in commencing civil court actions.”
AA Insurance said it has apologised to customers, corrected the issues, and refunded customers. It identified the problems as part of its internal review and self-reported them to the FMA.