Millions of customers have been wrongly charged merchant fees for government transactions over a period of several years despite being warned the surcharges were illegal, New South Wales officials say.
An estimated $144 million in merchant fees have been illegally charged on 92 million transactions since 2016, the state government said Wednesday.
This was despite repeated legal advice warning that the charges on the transactions from Service NSW and Revenue NSW were unlawful.
The state auditor general discovered the problem while reviewing departmental financial statements for the last financial year and brought it to the attention of government officials.
Fees may be imposed on merchants to recover the costs of handling transactions, including to cover banking charges.
The individual charges were small, such as a 30-cent surcharge for renewing a license for one year.
The NSW Labor government says it has created an incident management task force and is carrying out urgent work to stop the charging of illegal business rates.
Members of the public who have been charged fees are encouraged to sign up to receive updates.
Several ministers have written to the NSW Ombudsman calling for an investigation into possible “serious maladministration” over the charges, which were brought during the tenure of the previous coalition government.
The NSW Labor government says it has created an incident management task force and is carrying out urgent work to stop the charging of illegal business rates. Pictured is Prime Minister Chris Minns.
The matter has also been referred to the Independent Commission Against Corruption due to apparent failure to comply with legal advice issued in 2016 by crown counsel.
Merchant fees have since been removed for most transactions, including more than 80 per cent of payments handled through Service NSW.
Customer Service Minister Jihad Dib said the immediate priority was to stop the charges as quickly as possible.
“It is deeply concerning that this practice has continued, even though legal concerns have been raised,” he said.
“While the individual amounts normally charged may seem small, they have been charged illegally.”