By I. Hansana, Jadetimes News
AGL has been found guilty of breaching Australian energy regulations over 16,000 times by improperly using the government run Centrepay system to deduct welfare payments from nearly 500 individuals, years after they had ceased being customers, according to a federal court ruling.
This significant judgment may lead to legal action against three other energy retailers, who were also referred to the Australian Energy Regulator (AER) following a Guardian investigation into the flaws of the Centrepay system.
Centrepay, administered by Services Australia, is designed to allow government-approved businesses to receive early access to welfare payments, ensuring that essential expenses such as energy bills, rent, and school fees are covered first. However, energy retailers, including AGL, have misused this system, continuing to deduct funds from welfare payments even after customers had ended their contracts.
AGL is the first company to face legal consequences for the misuse of Centrepay. The AER took legal action against AGL, alleging that approximately 483 customers were overcharged over a five-year period, totaling around $700,000.
Court documents revealed that in one instance, AGL was aware that a Centrepay user was no longer a customer as of 12 January 2017, yet continued to make 100 deductions amounting to $4,111 from the individual's welfare payments over nearly four years.
AGL had contested its liability, arguing that it had limited control over the Centrepay deductions. However, the federal court ruled in favor of the regulator, finding that AGL had violated national energy retail rules 16,156 times. These breaches included 3,531 instances where AGL failed to notify affected customers, and 12,625 breaches related to the company's failure to refund the money.
The court also determined that AGL had violated retail laws by failing to implement adequate policies, systems, and procedures to ensure compliance with energy retail rules. Justice Kylie Downes stated that AGL had "no entitlement to receive and retain these amounts" and criticized the company's deliberate design that allowed it to treat each deduction as a payment for a bill, even when no further payments were due. Instead of refunding the excess funds, AGL applied them as credits towards future bills, even when no further bills would be issued.
The AER welcomed the court's decision, emphasizing that energy retailers must have systems in place to promptly refund overcharged customers. Clare Savage, the AER's chair, reaffirmed the regulator's commitment to investigating conduct that harms consumers and taking enforcement action when necessary.
AGL has indicated that it is reviewing the court's ruling. A spokesperson stated, "AGL received no benefit from these overpayments, and all those impacted have been refunded." The federal government has already referred three other energy retailers to the AER for similar allegations.
Previously, it was reported that Origin Energy was accused of receiving $2.5 million from the welfare payments of nearly 3,000 former customers through Centrepay, while Ergon Energy confirmed that it was in the process of refunding funds wrongly received via Centrepay.
The AER has stated that it will decide whether to pursue action against the other retailers based on the outcome of the AGL case.
