Origin share price shrugs off record $17 million fine from Federal Court

The Federal Court has ordered Origin Energy Ltd (ASX: ORG) and its related entities to pay $17 million for failing to comply with its obligation to protect customers experiencing hardship and payment difficulties.

Amid the news, Origin shares pushed away from selling pressure midway through Wednesday’s session to close flat at $5.93 apiece.

In broader market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) finished 0.13% higher today while the S&P/ASX 200 Index (ASX: XJO) closed 0.94% lower.

Let’s take a look at the news surrounding the energy company today.

Origin penalised for customer hardship breaches

Origin faced legal proceedings brought by the Australian Energy Regulator (AER). It alleged Origin’s automation processes had breached its financial hardship obligations.

The AER took action after Energy Ombudsman schemes from numerous states brought the company’s conduct to the regulator’s attention.

Origin was found to have breached its own hardship policies and retail rules after a review of its automated processes used to handle such accounts.

Notably, Origin displayed a lack of consideration in understanding customers’ “capacity to pay” when making changes to their accounts and payment plans.

Origin admitted it had breached these obligations on more than 100,000 occasions over almost four years from January 2018 to October 2021, the court found.

More than 90,000 customers across New South Wales, the ACT, Queensland, and South Australia were affected, the court ruled.

The penalty is the largest ever imposed for breaches of National Energy Retail Law and Rules.

AER chair Clare Savage was satisfied with the decision and said it highlighted Origin’s misconduct.

She said that applying automated processes across thousands of customers without considering whether they could actually pay “shows a complete disregard of the hardship obligations in the national energy laws”.

Savage said:

This record $17 million penalty reflects the seriousness of the breaches by Origin and should send a strong deterrence message to all energy retailers that they must maintain and implement their hardship policies in accordance with the law, to protect customers experiencing financial distress.

Origin share price snapshot

In the last 12 months, the Origin share price has clipped a 28% gain, gaining 13% this year to date.

The company has a market capitalisation of around $10.2 billion.

The post Origin share price shrugs off record $17 million fine from Federal Court appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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