Melbourne City Council has agreed to refund thousands of “unfair” parking fines because of an app drivers found confusing.Key points:The Ombudsman estimated more than 1,200 drivers were fined $83 each after confusing the letter “O” with the number “0” when entering their registration detailsMelbourne City Council has agreed to refund all fines where the mix-up on the PayStay app occurredLord Mayor Sally Capp acknowledged there needed to be “more fairness and common sense” in the council’s parking fine systemVictorian Ombudsman Deborah Glass said senior officers in the council’s parking branch had shown an “overzealous” attitude towards targeting drivers, and had “applied an overly rigid approach to parking errors”.Ms Glass estimated more than 1,200 drivers were fined $83 each, after they had parked legally but confused the letter “O” with the number “0” when entering their details in the PayStay app.”The Council knew the number 0 and letter O were virtually indistinguishable on registration plates, and drivers would not be aware they had made an error,” Ms Glass said.The council has now agreed to review every complaint it receives in future and will refund all PayStay fines where the mix-up occurred.It will also refund fines related to the issue from as far back as July 2017. Victorian Ombudsman Deborah Glass says council accepted her recommendations for the parking branch to review its systems.(ABC News: Billy Draper)Ms Glass said her investigation began after whistleblower complaints were received about the council allegedly trying to boost its parking revenue.”The allegation that the Council was improperly raising revenue was not substantiated,” Ms Glass said.However, she said there was a mindset within senior managers in the parking branch that “the customer is usually wrong and drivers must be punished for their infractions, no matter how small or how great the mitigation”.”This attitude continued for years, despite some council officers expressing concerns about it to management.”This mindset was further illustrated by the council rewording its Penalty Reminder Notice, ostensibly to encourage drivers to make payments as soon as possible, but against their own legal advice that the wording was misleading.”Ms Glass, who tabled a report into the fines to State Parliament on Wednesday, said the council had accepted her recommendations for the parking branch to review its systems, governance and reporting structures. The City of Melbourne collected $55.9 million in parking fees in 2019-20.(ABC News: Stephanie Chalkley-Rhoden)Council’s annual parking fine revenue hit $41.2 millionLord Mayor Sally Capp told ABC Radio Melbourne the council wanted to make amends to drivers who had been unfairly fined, saying Ms Glass’ report made for “shocking” reading.”The report highlights that we need more fairness and common sense in our systems to be able to deal with matters like this,” she said.The council’s 2019-20 budget shows $41.2 million was collected in parking fines alone, with parking fees accounting for a further $55.9 million.Earlier this year, three Melbourne councils agreed to pay back almost $20 million in parking fines, after the ombudsman said they acted “contrary to law”.The Glen Eira, Port Phillip and Stonnington did not accept they acted illegally, but agreed to refund affected drivers out of “goodwill”.