Australian energy giant Origin Energy is set to face court proceedings over allegations it systematically overcharged former customers and breached consumer laws more than 77,000 times. The Australian Energy Regulator (AER) has initiated legal action, claiming the company failed to refund millions taken from welfare recipients in a timely manner.
Details of the Alleged Overcharging
The regulator alleges that, between December 2019 and March 2025, Origin took payments through the Centrepay scheme from more than 3,400 former customers who had closed their accounts and owed no money. The total sum allegedly wrongly taken amounts to approximately $2.5 million, with one individual customer reportedly charged an extraordinary $11,000.
According to the AER, Origin did not inform these customers they were being overcharged, nor did it provide refunds within the period mandated by market rules. The company is further accused of failing to establish adequate systems to ensure compliance, despite allegedly being aware as early as 2017 that its processes could permit such overcharging.
Impact on Vulnerable Consumers
Clare Savage, Chair of the AER, emphasised the serious nature of the case, noting that the affected customers were likely already in precarious financial situations. "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 stated in a public release.
The Centrepay system is designed to help vulnerable Australians, including those on disability support and remote Indigenous communities, by allowing approved businesses early access to welfare payments for essentials like rent and energy. However, this case highlights systemic failures in its oversight.
Regulatory Action and Industry Context
The AER's investigation was prompted after reporting by Guardian Australia in May 2024, which revealed Origin was the largest user of Centrepay in the energy market at the time. Services Australia subsequently requested the probe.
This is not an isolated incident within the energy sector. The regulator has previously penalised other major providers for similar misconduct:
- AGL is appealing a $25 million fine related to overcharging 483 welfare recipients.
- Alinta Energy was fined over $1 million in November for comparable alleged conduct.
An Origin spokesperson said the company had self-reported overpayments to Services Australia in 2021 and worked to refund customers, adding, "We regret that we did not manage Centrepay deductions for our former customers as we should have and apologise to all those affected." The company claims to have since improved its systems.
The AER will seek court orders for Origin to pay fines, compensation, legal costs, and to implement an independently reviewed compliance program. The exact penalty sought has not been disclosed. Notably, Origin's market value rose to $19.2 billion on the day the proceedings were announced.
This case adds to the scrutiny of the Centrepay system, which underwent government reforms in 2024 to bar predatory operators and bolster consumer protections following a series of exposes into its misuse.
