AGL Retail Energy Limited and three other subsidiaries of AGL Energy Limited (together, AGL) have been ordered by the Federal Court to pay penalties totalling $25 million for failing to comply with their overcharging obligations related to Centrepay payments, in proceedings brought by the Australian Energy Regulator (AER).
This is the largest total penalty ever imposed for breaches of the National Energy Laws.
The Federal Court found that AGL had overcharged 483 Centrepay customers between 9 January 2017 and 28 October 2021. The Federal Court also found that AGL committed a total of 16,156 breaches by failing to inform and refund these customers within the required timeframes.
Centrepay is a government bill paying service where people use their Centrelink payments to make regular payments for essential goods and services.
In her penalty judgment, Justice Downes said: “…the contraventions by AGL occurred over a prolonged period of more than four years, during which time AGL contravened the relevant law over 16,000 times. AGL’s conduct had a direct and negative impact on 483 people who were individuals in receipt of welfare payments and therefore among the more economically and socially vulnerable of AGL’s customers. Such conduct was, on any view, “large scale”. It was very serious and it cannot be brushed aside…on average, each customer was deprived of nearly $1,000.”
AER Chair Ms Clare Savage welcomed the Court’s decision as a reminder of the critical importance of retailers prioritising consumer protections and fully complying with the laws.
“The record $25 million penalty reflects the seriousness of the breaches and serves as a warning that the AER expects all retailers to refund customers if they have been overcharged and to provide consumers the full protections afforded under the Rules.
“The actions by AGL negatively impacted hundreds of people over an extended period, many of these may have been experiencing vulnerability,” Ms Savage said.
Justice Downes also said: “…these matters aggravate the seriousness of the conduct because they reveal a lack of concern within AGL as to the impact on customers of being improperly deprived of their welfare payments, and a causal connection between that lack of concern and the ongoing contravening conduct.”
Ms Savage said: “The AER will take enforcement action where consumers have been harmed and will continue to monitor compliance with overcharging obligations.”
The Court also ordered 3 of the AGL subsidiaries to establish and implement a compliance program, and maintain it for 3 years, to improve the way they deal with overcharging of inactive customers related to Centrepay.
The AER also received referrals from Services Australia in May 2024 related to 3 energy retailers who allegedly continued to obtain deductions from Centrepay payments for inactive customers. The AER is currently considering the appropriate next steps in relation to these retailers.
Note to Editors
Judgment
The penalty decision was handed down on 19 December 2024. A copy can be found on the Federal Court website.
On Friday 23 August 2024, the Federal Court found that AGL breached overcharging rules in relation to Centrepay payments.
A copy of the decision can be found on the Federal Court website.
National Energy Retail Rules and National Energy Retail Law (National Energy Laws)
The National Energy Retail Rules impose legal obligations on energy retailers in respect of circumstances where a customer has been overcharged. These obligations protect customers by ensuring that if overcharging by a retailer occurs, customers are notified within 10 business days of the overcharge being identified by the retailer and that the customer is reimbursed. This protection extends to customers who are no longer being supplied by that particular retailer.
The National Energy Retail Law imposes legal obligations on regulated entities to establish arrangements to monitor compliance with the National Energy Retail Law and Rules.
Centrepay