Origin Energy to face court over 77,000 alleged law breaches after taking millions from welfare recipients | Consumer affairs
Origin Energy is to go to court for allegedly overcharging thousands of former Centrelink customers by a total of $2.5 million and breaking the law more than 77,000 times.
The company allegedly received payments via Centrepay over six years from more than 3,400 customers who had closed their accounts and were debt-free, including one customer who paid $11,000.
The Australian Energy Regulator (AER) ruled that Origin failed to notify customers that it had been overcharged or provide refunds within the time period required by market rules. It was claimed on Monday.
The regulator claimed in a statement on Monday that the overcharging continued from December 2019 to March 2025. In May 2024, Guardian Australia reported that the company had received payments and the regulator claimed Origin knew as early as 2017 that its system could allow overcharging.
AGL and Alinta Energy have already been ordered to pay millions of dollars in penalties for the misuse of Centrepay. AER chief executive Clare Savage told the press that Origin’s situation was particularly worrying.
“Many customers affected by this alleged behavior were likely financially vulnerable and would otherwise have spent the money they were overcharged on basic needs,” Savage said.
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To ensure individuals always have enough for basic needs, including rent and energy, Centrepay gives approved businesses early access to benefit payments before they fill the benefit recipient’s bank account.
Last year Guardian Australia revealed serious and widespread failures in the management of the Centrepay system.
The Guardian showed how the system was used to fund an extreme Christian rehabilitation center that subjected residents to homosexual conversion practices and exorcisms, and by household appliance rental companies to massively overcharge local Australians for low-value goods. The Guardian’s investigation also uncovered allegations that at least three major energy retailers were using the system to falsely take money from vulnerable Australians.
The report helped trigger an urgent government review and led to reform of Centrepay.
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What is Centrepay?
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Centrepay was established in 1998 during the Howard government as a voluntary bill payment service for people receiving Centrelink payments to make automatic deductions for essentials such as rent and utilities.
It currently has more than 620,000 users. A large percentage of them receive disability support payments. Almost a third are Aboriginal people, predominantly women, from remote areas who are looking for work or receiving parenting assistance.
Over time Centrepay has expanded to cover a range of businesses and services.
More than 15,000 companies have been granted access to Centrepay, which facilitated 23.7 million transactions worth $2.7 billion last year. Each transaction is subject to a 99c fee, which is paid to the government by businesses using the system.
Over the past decade, consumer advocates have raised concerns that many businesses registered to access Centrepay could cause financial harm to vulnerable customers.
The corporate regulator is investigating dozens of companies. At least four people he has already punished remain in the system.
In May 2024, the government announced a full review of the system to increase compliance, transparency and strengthen audit processes.
Services Australia, which operates the system, says it is working to improve delivery.
In 2022-23, 12 Centrepay businesses have had their contracts terminated due to non-compliance.
Services Australia asks AER to investigate in 2024 After Guardian Australia revealed the app affected Origin customers, who were the largest Centrepay users in the energy market at the time.
An Origin spokesman said on Monday: The company reported Centrepay overpayments directly to Services Australia in 2021 and worked with the agency to refund customers.
“We regret that we were unable to properly manage Centrepay outages for our former customers and apologize to anyone affected,” the spokesman said.
It is also claimed that Origin has not established systems to ensure that it complies with the rules. The spokesperson said The company has since improved its Centrepay deduction systems.
Despite the lawsuits, the company’s market value rose to $19.2 billion by Monday morning.
The AER will ask the court to order Origin to pay fines, declaratory judgments, customer damages and legal costs, make representations and establish an independently reviewed compliance program.
Refused to give details How much Origin will be forced to pay.
Origin’s alleged breaches involved seven times as many customers as the 483 benefit recipients allegedly overcharged by AGL, which is appealing a $25 million fine.
Alinta Energy in November Fined more than $1 million for similar alleged conduct.
The government reformed the payment service in 2024 by banning predatory hire-purchase operators and added more consumer protections this year.
– With additional reporting by Christopher Knaus
