Energy giant AGL has been ordered to pay the Commonwealth $25 million for overcharging hundreds of customers receiving welfare payments over five years.
The penalty imposed by Federal Court Justice Kylie Downes on Thursday is the largest in any case brought by the Australian Energy Regulator, since Origin was fined $17 million in 2022.
AGL and three of its subsidiaries, including AGL Retail, Sales, South Australia and Power Direct, were found in August to have breached National Energy Retail Rules more than 16,000 times.
AGL overcharged hundreds of customers who make regular deductions from their Centrelink payment. (Tracey Nearmy/AAP PHOTOS)
The court found AGL overcharged 483 Centrepay customers, a bill paying service in which people can elect to arrange regular deductions from their Centrelink payment, between December 2016 to November 2021.
It also found that AGL failed to notify and refund these customers within the required time frames.
The amount overcharged totalled $468,310.
"As customers were improperly deprived of their welfare payments for months or years as a result of the contraventions by AGL, this caused them loss and damage, which is a factor that weighs in favour of a substantial penalty," Justice Downes said in her decision.
She said the high penalty would be sufficient to deter AGL and others for breaking the rules.
"It is one that goes beyond being a mere 'cost of doing business' and it reflects the nature and extent of AGL's contraventions," she said.
Justice Downes also ordered AGL to implement processes to stop the overcharge issue from happening again.