AGL fined $25 million for overcharging welfare recipients

The Federal Court has found AGL broke the law by overcharging welfare recipients.

Transcript

00:00The court has found that AGL broke the law by continuing to take money off welfare recipients

00:09even after they had stopped being the power company's customers and stopped using their

00:15services. This happened due to deductions that were made by AGL through CentraPay. That

00:21is a government entity that helps people set up automatic payments straight from their

00:27welfare payments. The overpayments from CentraPay from AGL happened to hundreds of people on

00:34welfare as far back as last decade. The issue, as you noted Melissa, was taken to federal

00:41court by the energy regulator, the AER. The court in response found that not only did

00:47AGL overcharge people on welfare, but also it didn't tell them it had done this and it

00:54didn't refund them in a timely fashion for those overpayments.

00:58Okay, so talk us through the penalties and why they're significant.

01:04So the federal court has just this morning fined AGL $25 million over this CentraPay

01:11issue. This is actually the highest fine that has ever been doled out by the courts to a

01:19company as a result of legal action that has been brought by the energy regulator, the AER.

01:25The last time that the regulator had a fine nearly as close as this was back in 2022,

01:32which was $17 million against another power company, Origin, over failing to protect its

01:39customers when they were doing it tough financially. As well as the fine of $25 million,

01:46AGL has also been ordered by the federal court to implement at least a three-year

01:51compliance system so that it doesn't charge inactive customers again.

01:58So what is AGL saying now?

02:01So AGL has just put out a statement to the share market. It has apologised to its customers for

02:09the CentraPay overcharging and says that this should never have happened to them in the first

02:15place. But its statement also says that that fine of $25 million is far higher than it is expected

02:23and that it's going to review this judgment and consider whether it should appeal the ruling.

02:30Despite AGL saying that this fine is high, it also notes in its statement to the ASX that

02:36it doesn't really expect this to affect its profit margins. AGL is actually worth more than $7

02:42billion and it says that it's on track to make up to $730 million in profit this financial year.

02:50In terms of this CentraPay issue, it's also worth noting that AGL isn't the only big power company

02:58that might have issues of overcharging people on welfare. Just this year, the regulator had

03:06several other power companies referred to it over issues with CentraPay and it's currently

03:12looking at whether it should also go after them through the courts.