The seismic performance of a confined masonry (CM) technology using novel hollow clay blocks with large cavities for thermal insulation, and polyurethane glue rather than thin-layer mortar was analysed. Shear compression tests on two CM walls have revealed a specific type of damage at the interface between the tie-column and masonry due to the difference in thickness between the tie-columns (25 × 25 cm) and the masonry (38 cm). This motivated further research into the mechanisms behind this type of damage as well as the seismic response of the system as a whole. A simplified 3D micro-model was developed to replicate the observed phenomenon and analyse all aspects of the seismic response. A parametric study was then performed to explore the influence of longitudinal and transversal reinforcement, tie-column size, toothing, compressive strength of masonry, and bed joint reinforcement. The reinforcement detailing had little effect on the seismic response, though numerical simulations showed that the spacing of the transverse reinforcement should not be larger than 15 cm. The tie-column size had the largest effect on seismic response. If appropriately used, toothing and bed joint reinforcement could mitigate issues involving the shear failure of the tie-columns. However, if the tie-columns were reinforced by at least 1 % longitudinal reinforcement as required by the code, then the overall response was adequate regardless of whether the tie-columns experienced shear failure or not.