The federal government has not audited AGL’s use of Centrepay in two years despite revelations that the energy giant wrongly received more than $700,000 in welfare money from its former customers through the government-run debit system.
A Guardian Australia investigation of Centrepay, a system allowing businesses access to welfare payments before they hit recipients’ bank accounts, has revealed significant failings.
AGL allegedly received more than $700,000 in Centrepay payments from about 575 vulnerable Australians who had ceased being AGL customers years before.
Services Australia, the agency that administers Centrepay, says it is also working to retrieve overpayments made to a second energy company, Queensland’s Ergon Energy, prompting concerns that the problem may be widespread.
Guardian Australia has now learned that Services Australia has not audited either company’s use of Centrepay in the past two years, despite the overpayment problems.
A freedom of information request seeking any audit finding or report concerning AGL or Ergon since mid-2022 was unable to return documents.
Asked why no audits had been conducted, given the identified overpayment issues, a Services Australia spokesperson, Hank Jongen, said there were other ways of ensuring business compliance with the Centrepay rules.
“Compliance work is ongoing and not just limited to formal audits or reports,” Jongen said. “We have direct lines of communication with Centrepay approved businesses and prioritise working with them directly to become and remain compliant.
“We work closely with regulators and refer cases to them to investigate to ensure they meet legislative requirements, including consumer protection legislation.”
The government is reviewing the Centrepay system. Jongen said “compliance is one of the focus points of our review”.
“We’ll have more to say on this soon,” he said.
The Australian Energy Regulator has lodged federal court proceedings against AGL over its use of Centrepay. The company says it has no ability to stop deductions. It says deductions are under the control of Services Australia.
The regulator says the government was providing daily updates to AGL about its Centrepay use, which would have allowed it to identify that former customers were still being charged. It had also formally warned it to ensure that former customers weren’t continuing to wrongly pay the company via Centrepay in 2013.
AGL told Services Australia in 2013 it had reviewed its use of the system and fixed the problem. It also said that it had taken steps to tell some customers to cancel their Centrepay deductions when they left AGL.
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“From time to time, albeit not on a systematic basis, a customer was informed when they closed their account with the relevant AGL entity that they should notify Services Australia and cancel their Centrepay deductions,” AGL said in documents outlining its defence to the federal court proceedings.
AGL did not profit from the $700,000 in overpayments.
They sat on the accounts of former customers as credits. But the failings did divert money away from the bank accounts of welfare recipients.
In one case, about $4,111 was allegedly diverted from a person’s welfare payment in 100 separate deductions for almost four years after they ceased being an AGL customer.
All the money has since been refunded.
AGL has previously said it acted promptly when the overpayments were discovered.
“AGL promptly reached out to Services Australia, the administrator of this payment service, to ask them to cancel the deductions and facilitate refunds to those impacted,” a spokesperson said.
“Since becoming aware of the issue AGL has engaged with Services Australia on a remediation program aimed at improving its processes.”