AGL pay penalties and audited for alleged wrongful disconnection of vulnerable customers

Following a series of alleged wrongful disconnections of vulnerable customers, the Australian Energy Regulator (AER) required AGL to undertake an independent audit of how it treats its customers in financial difficulty and pay $100,000 in fines.  

AGL also provided compensation to the customers who were wrongfully disconnected and who previously had not received any compensation. 

AER Chair Clare Savage said it expects the industry to have its house in order. Businesses, including AGL, should have processes to ensure customers in financial difficulty are offered sustainable and affordable payment plans and are not wrongfully disconnected. AGL has since made significant changes to dealing with customers in financial difficulty and hardship following the AER's work. 

“The law rightly gives extra protection to vulnerable energy customers.”

Between May and August 2018, it is alleged that AGL disconnected customers across Queensland, South Australia and New South Wales who were experiencing payment difficulties, without first offering the customers’ payment plans.

The AER alleges AGL's conduct breached Rules where retailers must not disconnect a customer who is experiencing payment difficulties unless it has offered the customer two payment plans in the previous 12 months.

Some of these customers had even told AGL of their financial circumstances, which included unemployment, medical issues and receipt of Centrelink payments.

“By failing to offer these vulnerable customers a payment plan, AGL denied these customers access to assistance to manage their energy bills and to avoid disconnection for non-payment.”

The AER has also required AGL to conduct an independent compliance audit of its systems and processes for managing its disconnections, payment plans and hardship obligations. 

“We will continue to monitor AGL's compliance with our requirements.”

“We will not hesitate to take enforcement action against a business that does not comply with these crucial rules to protect vulnerable customers. Our response will also take into account the degree to which the root causes leading to poor customer outcomes are addressed,” Ms Savage said.

Notes to the editor 

The AER can issue an infringement notice where it has reasonable grounds to believe a business has contravened a civil penalty provision of the National Energy Retail Rules (see rules 107 and 111(2)).

The payment of these infringement notices does not constitute an admission of liability by the subsidiaries of AGL Energy.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future. 

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland.
  • We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.
Issued date: 
4 November 2020
AER reference: 
NR 37/20
AER Media 0466 409 921