Processes used by the government's Fines Recovery Unit to enforce penalties had been found to not comply with legislation, Police Minister Brent Potter said on Friday. Thousands of people could be affected.
"What we're talking about is the process in which the fines recovery unit go and try and recoup that money, whether it is cancellation of driver's licences or the inability to get a driver's licence," he said.
"There is going to be many individual cases because this goes over many, many years, over many governments and it is a monumental stuff-up. We're not shying away from that.
"Very simplistically, the process they use in their corporate governance hasn't complied or been in line with legislation."
Police Minister Brent Potter says the stuff-up stretches back across a number of governments. (Neve Brissenden/AAP PHOTOS)
Mr Potter said he coudn't speculate on whether the government could be liable for damages.
"Every individual's scenario is different and they need to seek their own legal advice," he said.
He emphasised it involved "people who have tens of thousands of dollars in fines that have actively avoided having to pay it".
"These aren't the mums and dads that have one or two fines they don't pay or get a late fee," he said.
Mr Potter said the original penalties, such as speeding or parking fines, were still legally valid and needed to be paid.
However, any subsequent enforcement action for fines not paid, such as having a driver's licence suspended, may not have been actioned appropriately.
Enforcement action on outstanding fines and penalties is on hold until the process issues are resolved.
Mr Potter said he was "not going to scapegoat anyone on this".
"It's going over multiple terms of government. We are in caretaker (mode). I don't want to politicise it.
"I'm here to tell Territorians that the mistake has been made and that we're going to fix it."
The NT government entered caretaker mode on Thursday, ahead of an election on August 24.
Motorists caught up in the controversy are being advised to seek legal advice. (Dave Hunt/AAP PHOTOS)
Mr Potter said the issue was first raised with cabinet on Tuesday.
It was identified because of a case brought before the courts, but he did not give details.
"We've made a very conscious decision to come out and tell Territorians exactly what we know," he said.
The government has established a task force within the Department of the Attorney-General and Justice to investigate how many people may be impacted and how to remedy the issues.
Department chief executive Gemma Lake said the review's terms of reference were being prepared, with the priority being identifying and contacting those affected.
"Our primary task at the moment is to get the message out to people, get them to call our hotline if they think that they get impacted," she said.
The hotline number is 1800 161 205 or visit https://nt.gov.au/fru-response.
