Electricity provider Origin Energy has been ordered by the Federal Court to pay more than $17 million in penalties for breaching its obligations to customers experiencing hardship and payment difficulties.
Key points:
- More than 90,000 customers were affected
- Origin Energy disconnected some customers after failing to recognise they were suffering financial hardship
- The Australian Energy Regulator says the automated processes Origin put in were not a good substitute for personal service
It is the largest total penalty ever imposed for breaches of the national energy retail law and rules.
Origin admitted that its automated processes for hardship customers resulted in it breaching its hardship obligations on more than 100,000 occasions over four years until October last year.
In total, more than 90,000 customers in New South Wales, the ACT, Queensland, and South Australia were affected.
As part of its case, the Australian Energy Regulator (AER) alleged that Origin failed to comply with its own hardship policies in dealing with 18 individual customers who were experiencing financial difficulties.
It was alleged that Origin failed to identify customers experiencing financial hardship, which meant they were not offered payment plans and, in some cases, were wrongfully disconnected.
Origin cooperated with the AER, admitting breaches of energy law and rules, and making joint submissions with the regulator on its penalty.
The court ordered the company to pay $200,000 in legal costs and establish a compliance and training program.
Automated processes too inflexible
AER chair Clare Savage said the court’s decision served as a clear reminder that automation could be a dangerous substitute for human interaction.
“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,” Ms Savage said.
“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.”
Ms Savage emphasised that the message was even more important in current market conditions, where customers were facing significant cost of living pressures, including as a result of recent energy price rises.
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