The Financial Markets Authority (FMA) initiated the civil case against Tower as part of its efforts to address past breaches by insurance and finance companies of fair trading laws. FMA’s head of enforcement, Margot Gatland, highlighted Tower’s deficient systems, despite a previous agreement with the Commerce Commission in 2017 to rectify the issues.
Tower had used multi-policy discounts as a marketing strategy to attract and retain customers, but failed to implement systems that could consistently deliver the promised discounts. Although Tower self-reported the breaches in 2021, the overcharging persisted until early this year, affecting around 61,000 policyholders with over 90,000 policies. Tower has since reimbursed affected consumers over $11.7 million.
Gatland emphasized the FMA’s commitment to ensuring fair, efficient, and transparent financial markets, stating that market integrity is crucial for fostering confidence among participants. The FMA’s actions against various banks and insurance companies in the past five years have resulted in significant penalties and repayments to customers, underscoring the importance of upholding fair dealing practices in the financial sector.
