Quinn Direct is refunding a total of €293,000 to 13,000 customers after the company incorrectly calculated refunds due to them when they cancelled their insurance policies, writes Simon Carswell, Finance Correspondent

Refunds are being made on 18,500 policies with an average of €15.77 plus compound interest. The refunds were incorrectly calculated on cancelled policies where there had been changes to the policies during the period of insurance.

The refunds were paid between January 2001 and February 2006. Quinn Direct discovered the error during an internal review. Quinn Insurance, a subsidiary of the group owned by entrepreneur Seán Quinn, has reported the matter to the Irish Financial Services Regulatory Authority.

Colin Morgan, general manager of Quinn Insurance, said: "We would like to apologise to all affected customers from 2001 to 2006 for these errors in calculating refunds on their policies and we will repay all amounts in the coming weeks."

The refunds do not relate to the recent court case involving Quinn Insurance and the Financial Services Ombudsman.

In October, the High Court overturned the ombudsman's decision that the insurer refund "administration" charges imposed on all affected customers over a six-year period for transferring insurance from one vehicle to another.

Ms Justice Mary Finlay Geoghegan said the ombudsman had no power to issue such a general direction when only one customer had made a formal complaint.