Origin pays penalties for alleged unlawful customer disconnections

Origin

Origin has paid $80,000 in penalties issued by the Australian Energy Regulator (AER) after it allegedly unlawfully disconnected 54 premises between January 2018 and May 2019.

Origin has also provided the AER with a court enforceable undertaking outlining steps it will take to prevent further wrongful disconnections, including a systems and processes audit.

AER Chair Paula Conboy said the AER’s investigation found systemic issues with Origin’s management of customer disconnections. Origin did not have adequate processes in place to satisfy the disconnection obligations in the National Energy Retail Rules (Retail Rules).

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The affected customers had contacted Origin to resolve their outstanding issues only to be unexpectedly disconnected.

“Disconnecting a premises is one of the most disruptive steps an energy retailer can take. The impact of an unexpected disconnection on the customer is significant and retailers must ensure supply is only interrupted when allowed under the Retail Rules,” Ms Conboy said.

“Energy is an essential service and it is crucial that customers can trust their energy provider to do the right thing.

“We expect energy companies to follow the energy laws, particularly in relation to consumer protection, and we will take enforcement action where we identify serious compliance issues.”

The enforceable undertaking includes a commitment to engage an independent auditor, approved by the AER, to audit Origin’s training and processes.

Origin has acknowledged in the undertaking that it wrongfully disconnected the customers.

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Ms Conboy said the AER would take a dim view of continued wrongful disconnections by Origin, and sounded a warning to other retailers to take heed.

“Customers must only be disconnected as a last resort. Our investigation found that Origin repeatedly failed to ensure a disconnection order was cancelled when it should have been,” she said.

“This is simply not good enough. If people get behind in their bills and then work with the company to address the issue, the company must hold up its end of the bargain.

“It is those in our community who are most vulnerable that suffer the greatest penalty when companies break the rules or get it wrong.”

Rule 116 of the National Energy Retail Rules sets out the circumstances where a retailer may disconnect an energy customer. In particular, rule 116 prohibits a retailer from arranging to disconnect a customer’s premises where that customer:

  • is a hardship customer or residential customer and is adhering to a payment plan
  • has an amount owing that is less than the amount approved by the AER (currently $300) and the customer has agreed with the retailer to repay the amount.