ACCC Joins Call For Centrepay Reforms Amid Rising Concerns Over Exploitation, Non-Compliance

The Australian Competition and Consumer Commission (ACCC) has joined forces with regulators and advocates to demand sweeping reforms to the Centrepay system, as part of its crackdown on unethical businesses that scam welfare recipients.

Australian Competition and Consumer Commission deputy chair Catriona Lowe said they had been receiving complaints about the unscrupulous practices using Centrepay "for many years," The Guardian reported.

The ACCC and advocates claimed that the government-run Centrepay, designed to help welfare recipients, was being exploited by businesses, particularly energy companies and retailers.

Major energy retailers AGL and Origin have been accused of wrongfully stripping vulnerable customers of their welfare funds, while rent-to-buy retailers have overcharged vulnerable Australians, especially in remote Indigenous communities. A disgraced Christian rehab service also misused the system for financial gain.

"The ACCC is also aware of circumstances where it is alleged that consumers experiencing vulnerability or disadvantage, including some First Nations consumers, have been signed to Centrepay arrangements where they have not given their free, prior and informed consent which has also led to those consumers experiencing financial harm," Lowe said in a submission to ACCC Centerpay reform.

"A robust compliance framework is particularly important, as the ACCC considers that some consumers, including those experiencing vulnerability, may be reluctant to complain about the conduct of Centrepay businesses for fear of losing access to the service," Lowe said.

To prevent abuse and shield welfare beneficiaries from exploitation, the ACCC is joining forces with advocacy organizations and authorities, such as the Australian Securities and Investments Commission (ASIC) and state ombudsman, to demand tighter regulation of Centrepay.

The ASIC believes many businesses using the Centrepay system are violating the rules, after a government probe of merely 4% of the 10,205 registered Centrepay companies found that only 42% are following the regulations.