AGL's admissions expose wrongdoing against welfare recipients

In Australia, the energy company AGL is facing scrutiny over its unlawful practices involving the Centrepay system, which allows welfare recipients to make automatic deductions for essential services. A federal court heard that AGL continued to improperly withdraw funds from ex-customers' welfare payments for more than four years, despite having previously pledged to stop. This situation was first highlighted when AGL was formally warned by Centrelink in 2013 for similar conduct and was issued a remedy notice. Following this warning, AGL implemented a manual fix and assured the government that such issues would not recur. However, in 2016, AGL inexplicably abandoned this fix, allowing the wrongful deductions to happen again. It wasn’t until 2020 that the conduct was detected, leaving AGL in a position where it failed to offer apologies or compensation to affected customers. Instead, the company sent letters to those affected that appeared to blame them for failing to update their Centrepay arrangements. As the federal court weighs potential penalties for AGL’s actions, the Australian Energy Regulator is advocating for a substantial fine to ensure that the company does not consider the penalty an acceptable cost of doing business. The incident raised serious concerns about AGL’s internal compliance measures, as there was a lack of formal documentation regarding Centrepay failings communicated to its staff. Lawyers have described AGL's reliance on informal communications as a “fanciful” approach to compliance, potentially risking a repeat of their past mistakes. The case highlights broader issues in the energy sector, including similar accusations against other energy retailers like Origin and Ergon regarding improper deductions from welfare payments.