The Minns government has baulked at refunding more than $144 million to people who were charged extra fees for paying by card for driver’s licence renewals, car registrations and other services in NSW despite years of warnings the process was illegal.

Finance Minister Courtney Houssos on Wednesday froze about 90 per cent of merchant fee surcharges on government services and said the Ombudsman and the NSW Independent Commission Against Corruption would investigate why two key agencies continued to charge them under the previous government even after three sets of legal advice that did not have authority to do so.