Origin Energy Accused of $2.5m Overcharging in Federal Court Case Brought by AER

On 22 December 2025, Origin Energy was taken to the Federal Court by Australia’s energy watchdog. The Australian Energy Regulator (AER) says Origin kept taking money from people who had already closed their energy accounts. Many of those payments came through Centrepay, a government system that lets Centrelink users pay bills directly from welfare payments. The AER claims this went on from December 2019 to March 2025, affecting over 3,400 customers and resulting in more than 77,000 alleged breaches of energy billing rules. 

In total, Origin is accused of holding onto more than $2.5 million that should not have been taken. Some former customers were charged hundreds or even thousands of dollars after their accounts were closed. The regulator wants the court to order refunds, penalties and stronger checks to stop this happening again. 

Origin Energy: The Core Allegations Explained 

Origin Energy is now at the centre of a major legal dispute in Australia. On 22 December 2025, the Australian Energy Regulator (AER) filed a case in the Federal Court accusing the company of continuing to receive money from former customers long after their accounts were closed and bills paid. The issue centres on Centrepay, a government service that lets people on welfare have regular payments, such as energy bills, taken directly from their Centrelink payments.

The AER says Origin did not stop these deductions, even when customers no longer owed anything. They also did not tell affected customers or refund the money in the time allowed under the National Energy Retail Rules.

Altogether, more than 3,400 customers were allegedly affected between December 2019 and March 2025, leading to about 77,000 separate breaches of the rules. One person is reported to have been charged more than $11,000 over nearly two years.

The regulator also claims Origin was aware of the problem as early as 2017 but delayed a fix that could have stopped further overcharges.

Who Is the AER and Why Does This Case Carry Weight?

The Australian Energy Regulator is the body that enforces fair behaviour in electricity and gas markets. Its job is to protect consumers and make sure rules are followed. When energy companies break those rules, the AER can investigate and take legal action.

This case follows a series of other regulatory actions. For example, in December 2024, the Federal Court fined AGL $25 million for similar Centrepay overcharging breaches. And in November 2025, Alinta Energy paid more than $1 million in penalties for its own Centrepay billing issues. These past outcomes show the AER is serious about enforcing compliance and protecting vulnerable customers.

Because Origin is one of Australia’s largest energy retailers, this case is especially significant. A court ruling against it could change how Centrepay deductions are managed industry-wide and strengthen protections for people who rely on Centrelink to pay bills.

Origin Energy’s Position: Response, Defence, or Silence?

Origin Energy has acknowledged the issues but disputes some of the claims. According to statements reported by the media, Origin said it self-reported overpayments to Services Australia in 2021. The company says it has worked with Services Australia to refund outstanding amounts and has improved its systems and processes to prevent similar mistakes in the future.

Origin has expressed regret for the situation. It points out that it cooperated with authorities once the errors were identified and took steps to address them. But the AER’s court action shows the regulator believes refunds and system fixes alone are not enough. The AER wants the court to make stronger orders, including penalties and a formal compliance program.

At this stage, Origin has not admitted liability in court and is expected to defend its position before the Federal Court.

Financial and Legal Consequences if Origin Loses

If the Federal Court rules in favour of the AER, Origin could face substantial penalties beyond returning the $2.5 million in alleged overcharges. The AER is seeking pecuniary penalties, which are financial penalties imposed by the court for breaches of law.

The regulator also wants orders for:

• formal customer remediation to ensure all affected customers are fully compensated,
• a compliance program that must be independently reviewed,
• and costs to cover the AER’s legal expenses.

Past cases give clues about possible outcomes. In the AGL case, penalties totalled $25 million.For Origin, the total financial impact could be even larger if the court decides strong deterrence is needed, especially given the scale of alleged breaches and number of affected customers. This could also influence investor confidence and Origin’s reputation.

What Does This Case Means for Australian Energy Customers?

This case has direct implications for people who pay for energy, especially those on Centrelink. People using Centrepay arrange bills to be paid automatically from their welfare payments. When this system is mishandled, it can hit households already under financial pressure.

Affected customers may be entitled to refunds, interest, and clear explanations of how the errors occurred. The AER’s action may push Origin to identify and reach out to anyone still owed money.

For other consumers, this case highlights the importance of checking statements and understanding how automatic deductions work. It also signals that regulators are watching closely and ready to act when rules are broken.

A Bigger Pattern? Rising Regulatory Pressure on Energy Giants

This lawsuit is part of a broader regulatory tightening trend in the Australian energy market. The AER has stepped up enforcement on billing and compliance issues in recent years, especially relating to Centrepay deductions.

The AER’s successful case against AGL and penalties against Alinta show the regulator is sending a message. Retailers must have strong systems to protect consumers, particularly vulnerable ones. The AER’s actions may encourage other companies to audit their own practices and fix issues before the regulator intervenes.

In addition, energy customers may now expect more transparency and accountability from their providers. This could lead to wider changes in how energy billing systems are tested and monitored.

What Happens Next: Timeline and Key Court Milestones to Watch

The Federal Court process is beginning. The AER has filed its case, and Origin will respond in court. Key steps ahead may include:

• Directions hearings where the court sets dates for future actions,
• Evidence exchange between the AER and Origin,
• and eventually a trial or settlement.

Because the matter involves complex compliance issues and a large number of alleged breaches, the legal process could take months into 2026. Observers will watch for interim rulings on penalties or procedures. Appeals are also possible if either party is unhappy with the court’s decisions.

Final Analysis: Why This Case Matters Beyond Origin Energy

This case goes beyond one company. It touches on fairness in essential services and the protection of vulnerable Australians. When automatic payment systems like Centrepay are used, safeguards must work correctly. Failure to protect customers can lead to serious financial harm and loss of trust in utilities.

The outcome of this case could shape energy billing practices across Australia. It may also affect how regulators enforce consumer protections and how energy companies build compliance systems in the future. Strong enforcement could ultimately benefit all energy customers by ensuring their rights are upheld and billing errors are less likely to occur.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.