The Australian Government welcomes the Federal Court's decision to penalise energy retailer AGL $25 million for wrongly charging customers through Centrepay.
The decision sends a message to every business in the country. It is unacceptable to have inadequate systems and processes in place to protect customers from harm, and failure to do so will have serious consequences.
Services Australia worked closely with the Australian Energy Regulator throughout this process to support their investigation, and will continue to work with regulators to protect their customers from financial harm.
Centrepay is an important budgeting tool that should empower Australians to have greater control over their finances.
This case is another example of why the government's recently announced proposed improvements to Centrepay are necessary.
They include improved safeguards and protections to reduce the risk of financial harm, including in regard to overpayments.
The Centrepay changes will also enable Services Australia to take stronger action against businesses that do not meet their obligations.
While the government welcomes the outcome in this case, the work is not done.
Services Australia's focus is to continue working with customers, advocates, business, and across the wider community, to help prepare for these important changes that will make Centrepay a better service.
Quotes from the Hon. Bill Shorten MP, Minister for Government Services:
"Just because you are a big corporation, doesn't mean you are above the law."
"I hope someone senior at AGL is held accountable. AGL shareholders too should be given answers how this could happen."
"The Court's decision is a timely reminder businesses have obligations to their customers and the broader community, and failure to meet those obligations is expensive."
"We want to empower Australians to have greater control over their finances. At its best, Centrepay can help do that. But unacceptable behaviour from some sectors has undermined overall confidence in the program."
"It's clear changes are needed to make the service better, so we're removing high risk services, and improving safeguards. This will make a big difference in ensuring Centrepay works in the interests of the customers who rely on it."
Comments attributable to Julia Davis, Senior Policy & Communications Officer, Financial Rights Legal Centre
"Consumer advocates welcome the $25million penalty that the Federal Court has imposed on AGL today."
"The nearly 500 customers that AGL overcharged were some of Australia's most vulnerable consumers. People setting up regular deductions through Centrepay to pay for energy are living on very fine margins. For some of these customers AGL overcharged them thousands of dollars over years. These customers would have experienced real financial hardship because of AGL's poor systems, and they were never even offered compensation or interest on their lost funds."
"This penalty sends a strong signal to AGL and other companies using Centrepay that this kind of neglect for their most vulnerable customers is unacceptable."
Centrepay will be improved by:
- Removing high risk services, including consumer leases and household goods, to realign Centrepay as a regular bill-paying service that reduces financial risk.
- Improving safeguards for customers, including imposing mandatory target amounts and end dates for deductions across most services.
- Redesigning Centrepay policy and implementing a stronger compliance framework to hold businesses to account. This will include:
- A new application and approval process for businesses wanting to use the service, with contracts tailored to different services.
- Formalising obligations for businesses when managing complaints, including ensuring their complaint processes are accessible and help customers and advocates.
- Complaints and compliance specialists within Services Australia, who will help resolve Centrepay complaints and make sure businesses are accountable for how they use Centrepay.
