Australia's largest energy retailer, Origin Energy, has been ordered to pay $17,605,000 by the Supreme Court of Victoria after admitting to breaches of Victoria's energy rules that affected 668,750 customers.
This is the largest financial penalty for breaches of Victoria's energy rules in the state's history.
Between them, Origin Energy Electricity Limited and Origin Energy (Vic) Pty Limited admitted to:
- failing to provide adequate best offer messaging to more than 655,000 customers
- failing to provide adequate support to 6,806 customers experiencing payment difficulty
- overcharging 78 customers
- recovering undercharged amounts from 411 customers beyond a four-month backbilling limit
- failing to adequately record, update or maintain information of 10 customers on the Life Support Register, and to provide relevant information to energy distributors.
The breaches took place between December 2021 and May 2023.
In addition to the financial penalty, the court ordered Origin (by consent) to:
- implement additional quality assurance measures
- publish public notices about its contraventions in major Melbourne newspapers
- run additional compliance training for staff
- pay the Essential Services Commission's costs.
In his judgment, His Honour Justice Michael Osborne said "if the court does not impose penalties of sufficient magnitude in light of the conduct that has been found to have occurred, there is a risk that other energy retailers who are currently complying with all relevant obligations may drop their present standards, particularly in circumstances where the cost of compliance is significant."
His Honour also said that "a penalty of sufficient size is warranted to deter Origin, and equally important, others like Origin, from transgressing such prohibitions, particularly where the consequence of transgression is financial harm to the consumer and correlative gain to the retailer."
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
"The Essential Services Commission took Origin to court because we think retailers upholding consumer protections is paramount, and this historic judgment shows the court does too."
"Retailers play a central and proactive role in offering customers support and strong consumer protections – that's a non-negotiable for every business operating in the Victorian market."
"The Essential Services Commission pushed for significant penalties in this case to ensure the cost of breaking consumer protection rules cannot be written off as a cost of doing business. We wanted the penalty to send a message about the importance of these rules, and we're pleased these record penalties have done that."
"While this decision will be felt most directly by Origin, it will reverberate in the boardrooms of all energy retailers. And the message is simple – compliance with consumer protections requires investment and attention, it cannot be an afterthought."
Background
Best offer messaging
Victorian energy retailers are required to tell customers on their bills whether they are receiving their deemed best offer at least once every 3 months for electricity and at least once every 4 months for gas. This includes telling customers how much money they could save by switching to the best plan the retailer offers, if they are not already on it.
Payment difficulty framework
The payment difficulty framework is a set of energy rules to better protect and support residential customers that are facing payment difficulty by:
- helping them avoid getting into debt with their retailer
- making it easier for them to pay for their ongoing energy use, repay debt when they have missed a bill and lower their energy costs
- ensuring they are only disconnected for non-payment of a bill as a measure of last resort.
