The Postal Services Agency has discovered about 49,000 illegal accounts for its postal insurance policy that provides tax-free capital gains if the money is applied to the purchase of a home or for use as a pension, agency sources said Monday.

The agency has canceled the illegal accounts, which represent about a third of the total, and returned some 56 billion yen in paid-in funds to the customers involved.

The insurance product, marketed at post offices nationwide, can be sold only to working people and offers tax-free benefits with their use limited to home purchases or pensions.

But an investigation by the agency determined that several ineligible customers, including company owners' dependents, purchased the policy, the sources said.

The illegal accounts were found in all areas governed by the agency's regional postal bureaus, they said.

The agency began an investigation in June into the roughly 148,000 policy accounts. By the end of last year, the probe had covered 141,825 accounts, or 96 percent of the total, and about 49,000 of them were found to be illegal.

For example, of 15,803 accounts held at post offices governed by the Tokyo postal bureau, 8,563 were illegal.

The agency said the main reason behind the problem was that postal workers sold the product without fully understanding the required eligibility criteria.

It plans to examine the problem further and may punish postal workers engaged in the illegal sales of the product, the sources said.