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