Victoria Police has been incorrectly charging thousands of firearm licence holders for two decades, an audit has found.

The organisation revealed it is in the process of contacting about 2500 firearm licence holders following an internal review which found Victoria Police may have overcharged or undercharged people a fee when they applied for or renewed a second firearm licence.

Police are in the process of contacting some firearm licence holders. Credit:iStock

The blunder dates back to 1997.

Under the Firearms Act 1996 and Firearms Regulations 2008, licence fees for new and renewal applications can be waived or discounted in a number of circumstances, including when licences are issued for primary production reasons.