In a landmark decision that has sent ripples through the Australian energy sector, AGL, one of the nation’s largest energy providers, has been hit with a staggering $25 million fine. This penalty comes as a result of the Federal Court’s findings of over 16,000 breaches where AGL wrongfully charged disconnected welfare recipients through the Centrepay system.
Centrepay, a government-controlled facility, is designed to help welfare recipients manage their bills by setting up automatic payments to various service providers. However, the court found that AGL continued to deduct payments from the Centrepay accounts of customers who were no longer connected to their services. Moreover, AGL failed to promptly inform these customers or issue timely refunds, leaving many in the dark about the unauthorised deductions.
The breaches, which occurred between December 2016 and November 2021, affected 483 Centrepay customers, with an average overcharge of $1,000 each. This misconduct was not AGL’s first brush with regulatory warnings; the company received a formal warning regarding similar issues back in 2013. Despite temporary rectification, the problem resurfaced in 2016, leading to the recent court case and subsequent fine.
AGL’s executive Jo Egan expressed deep regret over the incident, acknowledging that the company’s systems and processes had failed. The company has since issued apologies to those affected and has taken steps to prevent such an occurrence from happening again. Despite the apologies, the court’s findings suggest that the issue was not deemed a priority by AGL, leading to a delay in detecting the wrongful charges and refunding customers.
The court’s decision also serves as a warning to other energy providers, with government services minister Bill Shorten referring energy retailers Origin and Ergon to the regulator for their own Centrepay dealings. This could indicate a broader issue within the industry that may affect more consumers.
While AGL services about 4.5 million customers across Australia, and the number of affected individuals represents a small fraction of their total Centrepay users, the fine is a significant one. AGL has noted that the penalty will not impact their financial year guidance, which forecasts an underlying net profit between $530 million and $730 million. However, the company has expressed that the penalty was higher than expected and is considering an appeal.
What are your thoughts on AGL’s recent court ruling and the $25 million fine? Have you ever experienced issues with unauthorised charges or delays in refunds? We’d love to hear your opinion—share your thoughts in the comments below!
Also read: January 2025 welfare payment boost: What you need to know about the changes
