Energy giant Origin Energy is set to face legal proceedings after the Australian Energy Regulator (AER) alleged it committed more than 77,000 breaches of the law by overcharging former customers on welfare benefits.
Allegations of Systemic Overcharging
The regulator alleges that Origin took a combined $2.5 million from over 3,400 former customers who had closed their accounts and owed no money. The payments were deducted via the Centrepay system over a period of six years. In one extreme case, a single customer was allegedly overcharged $11,000.
The AER claims the overcharging occurred from December 2019 until March 2025. Crucially, it alleges Origin did not inform the affected customers they were being overcharged, nor did it refund them within the timeframe required by market rules.
Targeting the Economically Vulnerable
Clare Savage, chair of the AER, stated the case was particularly concerning because the customers affected were likely already in a precarious financial position. "Many customers affected by this alleged conduct were likely experiencing economic vulnerability and could have otherwise used the money they were overcharged to spend on essentials," Savage said in a public statement.
Centrepay is a voluntary service that allows approved businesses early access to welfare payments, intended to help individuals budget for essentials like rent and energy. However, the system has come under intense scrutiny following investigations revealing widespread misuse.
A Pattern of Misconduct and Regulatory Action
This is not an isolated incident within the energy sector. AGL is currently appealing a $25 million fine for allegedly overcharging 483 welfare recipients, while Alinta Energy was fined over $1 million for similar conduct in November.
The AER's investigation into Origin was prompted by a report from Guardian Australia in May 2024, though the regulator alleges Origin had known its systems could allow overcharging as early as 2017. Origin claims it self-reported overpayments to Services Australia in 2021 and has since improved its systems.
The regulator will ask the court to impose fines, order customer compensation, and mandate that Origin install an independently reviewed compliance program. The exact financial penalty sought has not been disclosed.
This case highlights ongoing failures in the Centrepay system, which facilitated 23.7 million transactions worth $2.7 billion last year. The Australian government initiated a full review of the system in May 2024 to strengthen protections for vulnerable consumers.
