Origin Energy will face court for allegedly overcharging thousands of former customers on Centrelink by a combined $2.5m and breaching laws more than 77,000 times.
The company allegedly took payments through Centrepay over six years from over 3,400 customers who had closed their accounts and owed no money, including one customer who paid $11,000.
Origin did not inform customers it was overcharging them or refund them within the timeframe required by market rules, the Australian Energy Regulator (AER) alleged on Monday.
The overcharging continued from December 2019 until March 2025, the regulator alleged on Monday. Guardian Australia in May 2024 revealed the company was taking the payments and the regulator has alleged Origin had known its system could allow overcharging as early as 2017.
AGL and Alinta Energy have already been ordered to pay millions in penalties over Centrepay mishandling. Clare Savage, chair of the AER, said in a public statement that Origin’s case was particularly concerning.
“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.
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Centrepay gives approved businesses early access to welfare payments before they hit a welfare recipient’s bank account, to ensure individuals always have enough for essentials including rent and energy.
Last year, Guardian Australia revealed serious and widespread failures in the administration of the Centrepay system.
The Guardian showed how the system had been used to bankroll an extreme Christian rehabilitation centre subjecting residents to gay conversion practices and exorcisms, and by home appliance rental companies to massively overcharge Indigenous Australians for low-value goods. The Guardian’s investigation also revealed allegations that at least three major energy retailers had used the system to wrongly take money from vulnerable Australians.
The reporting helped trigger an urgent government review and prompted reforms to Centrepay.
Services Australia asked the AER to investigate in 2024 after Guardian Australia revealed the practice was affecting customers of Origin, at the time the biggest Centrepay user in the energy market.
An Origin spokesperson said on Monday that the company had self-reported Centrepay overpayments directly to Services Australia in 2021 and worked with agency to refund customers.
“We regret that we did not manage Centrepay deductions for our former customers as we should have and apologise to all those affected,” the spokesperson said.
Origin also allegedly failed to set up systems to ensure it complied with the rules. The spokesperson said the company has since improved its Centrepay deductions systems.
The company’s market value increased on Monday morning to $19.2bn, in spite of the proceedings.
The AER will ask the court to order that Origin pay fines, declarations, customer compensation and legal costs, make declarations and install an independently reviewed compliance program.
It declined to detail how much it would ask Origin be forced to pay.
Origin’s alleged breaches relate to seven times the number of customers than the 483 welfare recipients allegedly overcharged by AGL, which is appealing a $25m fine.
Alinta Energy in November was fined more than $1m for similar alleged conduct.
The government reformed the payment service in 2024, barring predatory rent-to-buy operators, and has added further consumer protections this year.
– with additional reporting by Christopher Knaus
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