Europe's biggest insurer, Axa, is repaying €1.7 million to Irish customers whom it overcharged during a 13-year period to December 2004.
The Irish subsidiary of the €70-billion-a-year French giant admitted yesterday that it had overcharged more than 130,000 customers sums of up to €25 on their home and motor insurance.
The news comes just days after the State's second-biggest bank, Bank of Ireland, admitted it had overcharged 65,000 people up to €15 million on payment protection plans designed to insure loan repayments.
Up to last December, Axa had a practice of not repaying customers who overpaid by anything up to €25 on their policies. A company spokesman said that the group believed organising refunds was too expensive.
The overcharging largely occurred where customers changed their policies, for example, motorists switching to cars with cheaper insurance.
Where this resulted in cutting the cost of cover by less than €25, the company did not refund the customer.
At the same time, Axa's spokesman explained, the company did not pursue people who had underpaid their policies by less than the same amount.
Axa wrote to the Irish Financial Services Regulatory Authority (Ifsra) last December and informed it of the practice after it carried out a review of its fees and charges.
The process was sparked when the regulator last year ordered all financial institutions to carry out such examinations in the wake of revelations that AIB had overcharged foreign exchange customers by €25 million.
Ifsra told the insurer to repay the customers involved but accepted that the company did not benefit from the practice. Axa began repaying customers in January and is still going through that process. Its spokesman said yesterday that it had written to and identified all the customers involved.
In December, Axa ended the practice of not refunding customers who overpay by similar small amounts.
An Ifsra spokeswoman said yesterday that the regulator had an "ongoing focus" on charges as a result of the AIB controversy last year. A number of financial institutions have since owned up to overcharging customers for various products.
At the weekend, Bank of Ireland said that the €15 million it owes to borrowers in relation to payment protection plans dated back to 1989. Consumer lobbyists said at the weekend that the widespread use of these plans throughout the financial services industry meant that the bank's revelations could be just the tip of the iceberg.
Axa does not report figures for the Republic but it is the EU's biggest insurer by premium income and sells more than €70 billion in policies every year.
Recently it reported that profits in 2004 more than doubled to €2.52 billion from €1.01 in 2003.
