It was the largest penalty ever imposed for breaches of the National Energy Retail Law and Rules. It also affected more than 90,000 of its customers over a period of four years in NSW, Queensland, the ACT and South Australia.
The court found that Origin breached its obligations more than 100,000 times. The fault was in the company’s automated processes.
The breaches related to the company unilaterally imposing new customer payment plans without considering the customer’s capacity to pay, increasing payment amount without considering the capacity to pay and cancelling customer payment plans when it was unable to discuss with a customer a review of their plan, even when payments were still being made.
There were 18 occasions when Origin failed to implement its own hardship rules, failed to inform customers of the hardship policy, failed to offer and apply payment plans for customers in hardship and wrongfully disconnected customers in hardship.
The action was brought by the Australian Energy Regulator. Its chair Clare Savage said the court’s decision was a clear reminder that automation can be a dangerous substitute for human interaction.
She said it would also send a clear message to all energy retailers that they must maintain and implement their hardship policies in accordance with the law and protect customers in financial distress.
“Applying automated inflexible processes across thousands of customers without considering whether they can actually meet the payments shows a complete lack of regard of the hardship obligations in the national energy laws, which are designed to protect customers in vulnerable situations,” 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.”
Origin’s executive general manager of retail Jon Briskin said the company was strongly committed to supporting customers in financial hardship through our Power On program, and “we deeply regret that some customers did not receive some of the important protections they were entitled to”.
“This occurred when we automated some processes to try and improve the administration of our hardship program in 2018, but we got it wrong and we are sorry,” he said.
“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.”
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