NSW government launches mass investigation after residents charged with millions in illegal business charges

An investigation has been launched into “possible serious maladministration” after state Finance Minister Courtney Houssos revealed in a statement on Wednesday that Revenue NSW and Service NSW had been charging illegal fees to traders since 2016 during processes such as renewing driver’s licenses and marriage certificates.

The issue was identified by the NSW Auditor-General when settling some financial statements for 2023-24.

Service NSW was found to have received advice from the Crown Solicitor’s Office about the illegality of fees imposed on traders between February 2016 and December 2022, despite which customers were still being charged.

“We will shed light on what happened and why millions of people were illegally charged fees by merchants,” Ms Houssos said.

“Families, households and businesses expect governments to behave within the law. “That’s why all agencies have been tasked with reviewing their own processes.”

According to the release, additional merchant fees are in place to offset transaction fees charged by payment providers like banks.

An urgent management task force is currently underway by Minns. Government to stop the illegal act of charging fees to merchants.

Fees charged by Revenue NSW and the Rental Bond Board have been waived, including payments on more than 80 per cent of Service NSW transactions since the discovery.

Merchant fee surcharges have also been removed on more than 90 per cent of online payments, including Service NSW’s top 12 transactions such as renewing a driver’s license or registering a vehicle or payment of a fine.

“Our most immediate priority has been to put an end to these accusations as quickly as possible,” Minister of Customer Service and Digital Government Jihad Dib said in a statement.

“It is deeply concerning that this practice continues, despite the legal concerns raised.”

Service NSW is urgently continuing its work to remove fees on all remaining transactions, including on thousands of credit card terminals spanning multiple technology platforms.

While investigations continue, other payment methods are available, at no additional cost, such as paying in cash or online with over-the-counter assistance.

All state departments have been directed to report to the NSW Treasury by November 30 whether they charge fees to traders and confirm they have the legal authority to do so.

Surcharges on Service NSW transactions typically include 30 cents for renewing a one-year license, 29 cents for a marriage certificate and $1.92 to renew a small car registration.

The average surcharge on a Revenue NSW payment in 2023-24 was 92 cents.