Britain’s biggest bailiff company overcharged people it was pursuing for unpaid debts and has been forced to launch a refunds programme, the Guardian can reveal.

Marston Holdings, which is used by companies and state-funded bodies including Transport for London to recover debts and fines, has apologised to consumers after overcharging “enforcement fees” related to unpaid road traffic penalties it was chasing.

The body that oversees the bailiff sector in England and Wales said the company’s behaviour was “unacceptable” and had breached regulations designed to protect the public from overcharging.

In England and Wales, when a bailiff – or “enforcement agent” – visits someone’s home, a fixed fee of £235 is added to the debt.

Sources said thousands of individuals may have been overcharged after the company added multiple enforcement fees to their debts. Marston did not say how many people may be affected but said fewer than 0.3% of its debtor caseload have been affected.

Minutes of a trade body meeting last month – seen by the Guardian – stated that Marston was alerted to this issue in April, and that an investigation by an industry oversight body “revealed breaches in multiple cases where more than one [£235] enforcement fee had been charged instead of the cases being linked under one fee”.

Marston said “the [systems] issue has been fixed” and refund cheques had been sent to “all of those affected”.

However, the minutes from last month’s meeting said Marston had initiated a review of seven years’ worth of cases, and the company was committed to rectifying the errors via a full refunds scheme, with a dedicated call centre, that would operate for three years.

Marston works with dozens of local authorities as well as official bodies including TfL, HM Courts & Tribunals Service (HMCTS) and Highways England (now National Highways). It boasts of recovering “over £850m each year on behalf of the taxpayer” and also works for private companies.

TfL said Marston “are not carrying out any enforcement work for us at the moment. Their contract is under review.”

The UK bailiff sector is big business: every year, millions of people are on the receiving end of enforcement action, with data showing there were 8m cases in 2024, with a total value of £5.2bn. In 2023 the Guardian reported that the profits of leading bailiff firms had seen risen to record levels during the cost of living crisis.

It is estimated that well over half of the cases where bailiffs are called in involve unpaid road traffic and parking fines and penalties, including congestion charges and penalties relating to Ulez (ultra-low emission zone) and driving in a bus lane.

Chris Nichols, chief executive of the Enforcement Conduct Board (ECB), the independent oversight body for the bailiff sector in England and Wales, said: “It is very concerning to see breaches of regulations that are there to protect the public from overcharging.

“This is unacceptable behaviour, and the ECB is taking strong action to ensure that people who have been impacted are found and refunded, and that this behaviour is never repeated.

“We have ensured that Marston has signed up to a robust action plan to put this right.”

In a refund letter sent by Marston Recovery – one of the group’s brands – to one of those affected last month the company apologised for a “mistake” with the enforcement fees applied to the person’s debt, and said: “We’ve now fixed this issue, and you’re due a refund.”

The letter included a reference to “HMCTS” – however, Marston says the overcharging issue does not involve fines imposed by HMCTS and that an administrative error led to this wording not being removed. The letter included a cheque for a sum approaching £250, made up of a refund of £235, plus interest.

Marston said the three-year period for the refunds scheme is a precautionary measure to account for scenarios such as this, and it would make every effort to reach everyone affected.

Earlier this summer the government announced a package of measures designed “to deliver a fairer system of debt enforcement”.

A spokesperson for Marston Recovery said: “In the spring of this year an issue was identified where some individuals with multiple unpaid road traffic penalties had been overcharged enforcement fees. The issue has been fixed.

“Letters, with cheques for a full refund plus interest at 8%, have been sent out to all of those affected. Those letters include an apology and guidance on how to contact us if there are any questions or help is required.”

They added: “Since the issue first came to light, we have worked closely with the ECB … and all of our clients. We take full ownership and have worked hard to do the right thing by repaying people back what they are owed.”