Automated compliance under the microscope? AER initiates proceedings against Origin in the Federal Court.

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This week the AER announced that it had initiated proceedings in the Federal Court of Australia. The AER alleges systemic failures in the automated processes that Origin is using concerning customers experiencing hardship and payment difficulties, in breach of the National Energy Retail Law and Rules.

The AER state that Origin has implemented systems that result in Origin making unilateral changes to customers’ payment plans, failing to consider customers’ capacity to pay when establishing or changing payment plans, and cancelling payment plans in breach of Origin’s own hardship policies.

Compliance is a heavy burden for those operating in the energy sector. Combined with hardship resulting from COVID and a motivated regulator with a range of new enforcement powers, we are destined to see more and more showdowns of this nature.

Lessons

The key lessons for energy sellers from this announcement include:

  • the need to carefully examine all aspects of processes from a compliance lens; and
  • the need to ensure that payment arrangements have regard to a customer’s capacity to pay and are set out in a manner compliant with applicable laws;
  • there has never been a more important time for energy sellers to examine their hardship policies, practises, and processes.

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