An audit of the council’s property database going back to the 2009-10 financial year uncovered $3.7 million worth of outstanding rates, leading to some residents receiving $60,000 refunds, while small businesses will be slugged up to $93,000.

In the ensuing outcry, business operators have gone to Fair Trading, sought legal advice and threatened to set up a Facebook page on the rates debacle.

Member for Monaro John Barilaro says the backdated bills are unfair and has asked the Minister for Local Government to investigate whether the action is consistent with the Local Government Act.

Mayor Tim Overall was overseas last week when notices for backdated rates stunned ratepayers, mostly small business operators.

On his return he said he would be seeking legal advice on whether the council could write off the outstanding amounts. Cr Overall said he was aware of the steep increases.

But no actual amounts were mentioned when a report on the property data audit was circulated to the councillors with a meeting agenda in February, with a recommendation to ''receive the report for information''.

Legal advice, and the fact council was already starting to recover the charges, accompanied the report.

Cr Jamie Cregan says he is ropeable.

“It is not a fair system. They had an opportunity to bill rates, someone has paid the rates for that year and (the council) are now trying to say, ‘We didn’t bill you enough’.

‘’Any other business would get laughed at. That would be an absolute laughing stock.’’

Council said it was obliged under the Local Government Act to recover outstanding rates. Cr Cregan said the same Act also had a section that allowed a council to write off outstanding rates.

He would be taking a motion to the next meeting of council to do just that.

“If they have overcharged anyone, they should only have to pay the fair amount. I am quite comfortable with them getting their refund.’’

Cr Cregan, who is Queanbeyan Business Chamber president, said the council says it too is a business.

“So now is the time they have to really behave like a business.’’

In a statement last week the council said it was unavailable to answer questions, other than to clarify issues.

On Monday a spokesman said councillors had the opportunity to question and change the report’s recommendations, and it was clear fees would be charged.

Lisa Robinson, who moved from Canberra to Queanbeyan four years ago to establish a health and fitness business, has been hit with a $7000 bill.

''The stories, the human face of the consequences of this rates review are really pretty drastic, and in many of our cases this could lead to financial ruin and hardship, let alone the fallout with consequent stress and illness,'' Ms Robinson said.

“These types of draconian decisions are made without any regard to the mental health of small populations such as Queanbeyan,’’ she said.