Record penalty for energy provider’s ‘complete disregard’
The Federal Court has slapped Origin Energy with a record $17m penalty after the electricity provider was found to be failing in its obligation to protect customers experiencing hardship and payment problems.
The penalty is the largest-ever punishment imposed for breaches of the national energy retail law and rules.
Origin conceded it had breached its obligations to consider customers’ capacity to pay when making changes to their payment plans – more than 100,000 times over a four-year period.
More than 90,000 customers in NSW, Queensland, South Australia and the ACT were affected over the timeframe in question, which began in January 2018 and ran through to October 2021.
The Australian Energy Regulator (AER) brought forward legal proceedings against Origin after its misconduct surfaced.
The AER accused Origin of failing to offer payment plans to those experiencing financial hardship, with some customers wrongfully disconnected in a “complete disregard” to national laws.
The misconduct is being blamed on Origin’s automated processes for hardship consumers in what could serve as a reminder of the need for human interaction as a more reliable form of customer service, particularly as energy prices climb amid the cost-of-living crisis.
“Applying automated inflexible processes across thousands of customers without considering whether they can actually meet the payments shows a complete disregard of the hardship obligations in the national energy laws, which are designed to protect customers in vulnerable situations,” AER chair Clare Savage said.
“When a retailer automates aspects of its hardship program, it needs to ensure it continues to offer individualised and tailored solutions to customers and has regard to a customer's circumstances as the rules require.
“For many customers, being unable to afford a necessity like electricity is distressing enough.
“If a customer is not afforded the protections under the laws and rules it may push them closer to debt collection and disconnection, causing even greater distress.”
Origin retail general manager Jon Briskin said the company “deeply” regretted failing to protect vulnerable customers.
“We put a stop to these automated processes last year, have taken significant steps to improve our compliance and training to ensure hardship customers receive the assistance they’re entitled to, and we are in the process of compensating customers who were disconnected in error,” Mr Briskin said.
Originally published as Record penalty for energy provider’s ‘complete disregard’
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