Latest news with #Centrepay
West Australian
18-07-2025
- Business
- West Australian
Horizon Power says customers not affected by Synergy Centrepay scandal
Horizon Power has confirmed that none of its customers have been affected by the Synergy Centrepay scandal which overcharged nearly 3000 vulnerable customers since 2009. On July 14 the Economic Regulation Authority revealed that Synergy had collected cash through Centrepay — a payment service for Centrelink customers — after vulnerable clients had closed their accounts. It found the government-owned utility, which is the monopoly supplier of electricity on WA's main grid thanks to laws banning competition, overcharged nearly 2845 customers since 2009. Horizon Power, who is the main electricity supplier to regional grids across the State, confirmed that a similar situation had not occurred with their customers. 'Horizon Power is aware of recent reports regarding inactive accounts and can confirm our customers have not been impacted,' a Horizon Power spokesperson said, speaking to the Broome Advertiser on July 18. Regulators found Synergy allegedly failed to notify customers that they had been overcharged within the required 10 business day time frame before hitting the company with an enforcement notice for breaching the State's code of conduct for electricity retailing. The ERA believed $2.3 million remains owed to the Centrelink customers Just hours later, Energy Minister Amber-Jade Sanderson said there would be an independent review of Synergy's billing systems. Synergy began contacting customers in April and has so far paid back just 30 per cent of the money owed. Synergy chief Kurt Baker — who has been at the helm since January — said the business 'apologises sincerely' to affected customers. He said Synergy had notified the regulator of the breaches. 'We recognise that the Centrepay bill management system is in place to support vulnerable customers and in this instance, they were let down,' Mr Baker said.
The Age
14-07-2025
- Business
- The Age
Synergy overcharges WA Centrelink customers by $2.3 million
State-owned electricity retailer Synergy has overcharged 2845 of its most vulnerable customers a collective $2.29 million since 2009. Synergy was forced to repay the money and apologise after the over-charges were reported to WA's utility watchdog, the Economic Regulation Authority. The authority found Synergy breached its code of conduct by failing to tell customers within 10 business days that they had been overcharged. Synergy reported to the authority that it continued to accept Centrepay payments from the customers despite their electricity accounts being closed. Centrelink customers can set up Centrepay accounts to deduct payments for utilities like electricity and water before they receive the rest. The Economic Regulation Authority said this equated to about $2.29 million in overcharges since 2009 – around 1000 customers owed more than $500. Synergy said about half of all refunds were $250 or less. Authority Chair Steve Edwell said the breach was particularly concerning given Synergy's position as the largest retailer in the state and the vulnerability of the customers on Centrelink support. 'As a sophisticated and large retailer, we would expect Synergy to have systems in place that would have identified these payments accruing in closed accounts,' he said. 'We also expect Synergy to make changes to its customer management systems so that these sorts of payments are automatically flagged and dealt with.'
Sydney Morning Herald
14-07-2025
- Business
- Sydney Morning Herald
Synergy overcharges WA Centrelink customers by $2.3 million
State-owned electricity retailer Synergy has overcharged 2845 of its most vulnerable customers a collective $2.29 million since 2009. Synergy was forced to repay the money and apologise after the over-charges were reported to WA's utility watchdog, the Economic Regulation Authority. The authority found Synergy breached its code of conduct by failing to tell customers within 10 business days that they had been overcharged. Synergy reported to the authority that it continued to accept Centrepay payments from the customers despite their electricity accounts being closed. Centrelink customers can set up Centrepay accounts to deduct payments for utilities like electricity and water before they receive the rest. The Economic Regulation Authority said this equated to about $2.29 million in overcharges since 2009 – around 1000 customers owed more than $500. Synergy said about half of all refunds were $250 or less. Authority Chair Steve Edwell said the breach was particularly concerning given Synergy's position as the largest retailer in the state and the vulnerability of the customers on Centrelink support. 'As a sophisticated and large retailer, we would expect Synergy to have systems in place that would have identified these payments accruing in closed accounts,' he said. 'We also expect Synergy to make changes to its customer management systems so that these sorts of payments are automatically flagged and dealt with.'
ABC News
01-07-2025
- Business
- ABC News
Remote retailers warn businesses could 'collapse' when federal Centrepay crackdown takes effect
Several Northern Territory retailers say their businesses will not survive if they are banned from using a controversial Centrelink payment system, ahead of a federal crackdown expected to take effect in coming weeks. Centrepay is a system used by more than half-a-million Australians that allows people to pay for goods and services through deductions from their social security payments. It was introduced as a way of paying essential bills like rent and power, but has expanded over time to be used in shops selling clothes, whitegoods, phones and speakers. Under changes to be rolled out by the federal government, retailers selling those "household items" are now set to be booted from the scheme, along with funeral companies and some food providers. The reforms follow a series of controversies, including two NT clothing stores being ordered to stop using the service over concerns they were putting their mostly Aboriginal customers at financial risk by signing them up to debts they did not fully understand and could not afford. The Albanese government announced sweeping changes to the service in December last year, with former minister Bill Shorten saying Centrepay had been "misfiring" and "not working as intended". "Some services being provided through Centrepay were really not appropriate for the vulnerable people on the government's systems," he said at the time. The reforms are expected to only apply to new businesses at first, with existing Centrepay-enabled businesses in categories slated for removal to be given more time to phase out their use. In Katherine, there are five clothing stores using Centrepay, which financial counsellors have previously described as a "high concentration" for a town of its size. Three of them have said their businesses will go broke without access to the scheme. Urban Rampage, a chain with stores across remote northern Australia, told a tribunal last year an Australian Securities and Investments Commission (ASIC) order to stop using Centrepay would cause its business to "collapse" and its staff to be terminated. Makalu Fashion, another Centrepay-enabled clothing retailer, has been trading on Katherine's main street for about two years. "I don't think my business can survive if Services Australia completely stops Centrepay," owner Dinesh Lamichhane said. Mr Lamichhane said while he agreed with stricter regulations, he did not want to see Centrepay taken away altogether. "There should be tighter rules," he said. "I do not hesitate to say this system really encourages the businesses to misuse the money of the Aboriginal customers." But he said Centrepay was also "really important" to his customers as a budgeting tool. "[The] majority of customers, they have the habit of not saving the money in their pocket," he said. "That's why if Centrepay exists, it is really helpful for them to buy their necessities, especially their clothing items and footwear." Mr Lamichhane said he believed retail businesses should only be able to draw down a maximum of $50 a fortnight from Centrelink, and customers should only be able to enter into a Centrepay agreement with a single retailer so they did not end up with multiple deductions. "I think Services Australia can easily do that," he said. The reforms have been cautiously welcomed by financial counsellors. Kimberley-based Bush Money Mob counsellor Allan Gray said he had no sympathy for retailers that were financially dependent on Centrepay. He said many stores were charging "massive prices to remote Aboriginal people who are living below the poverty line". "I have literally seen hundreds of remote Aboriginal people ripped off by abuse of Centrepay by greedy businesses," he said. However, Mr Gray said he was concerned shops would turn to other forms of credit, like Afterpay or direct debit systems, which could still see financially vulnerable customers ending up with big debts. He said while recent tightening of laws that govern buy-now-pay-later services meant advocates had a better chance of protecting customers, they had not removed the risk. "It feels a bit like Whac-A-Mole," he said. "I have no doubt that if someone is greedy and they're determined … [they will] find a new way to take the limited income from remote Aboriginal people, but we now have far more tools at our disposal." Vennessa Poelina, a community advocate and Nyikina traditional owner from Broome, said she had seen many remote Aboriginal people get into trouble with Centrepay debts to clothing retailers. She said shopkeepers had an obligation not to abuse the trust of Aboriginal customers from remote communities who often "don't know how to question" the payment options presented to them. "The [shopkeeper] will go 'oh look, we can take money out of your account, you don't have to pay the whole $80!," she said. "That's how I think people started to get hooked into that system of Centrepay." Mr Shorten said in December the changes to Centrepay would be "fully introduced" by July 1 this year. But Services Australia has since confirmed the plan has been delayed, with more details on the changes to be revealed "in the coming weeks". A spokesperson for the Urban Rampage chain of clothing stores said the "ongoing delay" was creating a regulatory limbo for its business. The company is challenging an ASIC order to stop using Centrepay at the Administrative Review Tribunal, in a move that could prove futile if the changes go ahead as planned. The spokesperson confirmed Urban Rampage was offering customers other payment options in the meantime, including Afterpay and direct debits.
The Guardian
23-02-2025
- Business
- The Guardian
Energy giant AGL is disputing $25m fine for wrongly taking welfare money from hundreds as ‘excessive'
Energy giant AGL is disputing a 'manifestly excessive' $25m fine for using the Centrepay debit system to wrongly take welfare money from hundreds of vulnerable Australians. It argues that a judge should not have used the massive financial penalty to try to 'provoke some attention' from the company's board and executive leadership. Late last year, the federal court imposed the hefty fine and excoriated AGL for wrongly taking money from 483 welfare recipients via Centrepay, the scandal-plagued, government-run system that allows automatic diversion of social security payments to essential services, like electricity bills and rent. A Guardian Australia investigation last year revealed deep flaws with the system, including that some of Australia's biggest electricity retailers had used Centrepay to continue receiving welfare money from the pockets of departed customers long after they left. Sign up for Guardian Australia's breaking news email In AGL's case, the company used Centrepay to receive and retain an average of about $1,000 from the welfare payments of 483 former customers between early 2016 and late 2020. The customers had paid their final bills and owed AGL nothing. The failure occurred despite AGL previously being warned about using Centrepay to receive money from former customers. The 2013 warning prompted AGL to fix its systems, only to then inexplicably abandon the fix in 2016, allowing the practice to resume and continue undetected for four years. The federal court found AGL's conduct breached national energy retail rules 16,000 times and imposed the $25m fine. AGL then publicly apologised to affected customers and said it was 'disappointed that this issue occurred'. Earlier this month, however, AGL filed an appeal against the decision, disputing its liability and the severity of the fine. Court documents obtained by Guardian Australia show AGL has argued the $25m fine was 'manifestly excessive'. The appeal will argue the judge was wrong to find that the penalty was required to 'provoke some attention from those on AGL's board and executive leadership team to focus more closely on these issues' and 'seek to effect necessary cultural change within AGL'. The judge, the appeal argued, was also wrong to only consider AGL's 'size and financial position' when deciding whether a $25m fine would be oppressive. It argued the judge should have had regard to the fact that AGL was not 'motivated by financial gain or potential for financial gain' and was wrong to conclude the company had not done all it could to return the money to affected customers. Sign up to Afternoon Update Our Australian afternoon update breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion AGL declined to comment on the appeal, saying only: 'AGL has closely reviewed the Court's judgment and decided to appeal [against] the judgment to the Full Federal Court. As the matter is before the Court, we will not be making any comments at this time.' The Australian Energy Regulator, which brought the case, also declined to comment. Financial Counselling Australia co chief executive officer Dr Domenique Meyrick said AGL should 'do the right thing' by the affected customers and withdraw its appeal. The court previously heard that AGL, when it finally detected the problem in 2020, did not apologise to customers or offer to compensate them, something one senior executive conceded was wrong. Instead, it sent a letter to welfare recipients that appeared to blame them for the mistake. 'We noticed, after you left us, you failed to update your Centrepay arrangement,' the letter began.
