Centrepay Class Action
GMP Law is investigating a class action against the Commonwealth of Australia. This class action concerns the operation of the online bill-paying service, Centrepay, administered through Centrelink. The claim alleges that the Commonwealth’s management of Centrepay has resulted in the financial exploitation of vulnerable welfare recipients by business providers approved to operate through the Centrepay portal.
GMP Law aims to hold the Commonwealth accountable for its failure to adequately oversee and regulate the Centrepay system. We are committed to securing fair compensation for those who have experienced harm. Given that approximately 600,000 welfare recipients use Centrepay to make payments to 15,000 businesses, the potential scale of this issue is significant.
Current status
GMP Law has commenced an investigation into the potential class action against the Commonwealth of Australia based on reports of widespread misuse and exploitation within the Centrepay system.
The investigation is in its early stages. The firm is gathering evidence and assessing the viability of a class action.
GMP Law is calling on people who have been affected by Centrepay-related financial exploitation to register their interest in the potential class action.
Key developments
Recent events have exposed flaws in the Centrepay system:
In February 2024, The Guardian Australia began investigating Centrepay, resulting in their first published report in March 2024 exposing Centrepay-enabled financial exploitation.
Since March 2024, The Guardian Australia has persistently documented businesses that improperly received funds intended for welfare recipients, revealing issues of non-compliance and lack of auditing
In May 2024, the government announced its intention to reform the Centrepay system in response to media pressure and long-standing complaints
On 9th July 2024, the Australian Competition and Consumer Commission (ACCC) made a submission to Service’s Australia Discussion paper on the reforms. They raised concerns about allegations that:
- Some consumers were signed up for Centrepay arrangements by businesses for goods they neither wanted nor could afford, leading to financial harm
- Vulnerable consumers, including some First Nations individuals, were reportedly enrolled in these arrangements without providing free, prior, and informed consent, resulting in further financial distress
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The Australian Energy Regulator (AER) launched a major prosecution of energy giant AGL over its use of Centrepay to continue taking welfare money from hundreds of departed customers. In August 2024, the Court found AGL breached the overcharging rules.
About the class action
This class action addresses serious allegations concerning Centrepay and its exploitation of vulnerable welfare recipients. The lawsuit focuses on the alleged improper enrollment of these individuals in financial arrangements without their informed consent, resulting in significant financial harm and distress for those who rely on welfare support. The core issues of this class action include:
Negligence: The Commonwealth is accused of failing to properly oversee and regulate the Centrepay system.
Breach of Duty of Care: There are claims that the government failed in its duty to protect vulnerable welfare recipients from financial exploitation.
Systemic failures: The class action alleges that there were systemic failures in the administration and monitoring of Centrepay.
Inadequate compliance measures: In 2022-23 Services Australia investigated just 4% of businesses on Centrepay for compliance, with just 12% of those investigated found to be breaching the rules.
Failure to act on known issues: The Government is accused of failing to address long standing complaints and known issues with Centrepay until media pressure forced action.
The issue
Centrepay, designed as a budgeting tool for welfare recipients, has been exploited by some businesses, leading to financial harm for vulnerable Australians. The Commonwealth is accused of failing to adequately regulate and monitor the system, allowing widespread non-compliance and exploitation.
Risks identified
Welfare recipients using Centrepay face several risks, including:
- Unauthorised deductions from welfare payments
- Continued payments to businesses after service termination
- Excessive charges for goods and services
- Exploitation by businesses that should not have been approved for Centrepay
- Psychological and emotional distress due to financial hardship
- Potential coercion into using Centrepay by certain service providers.
Economic and financial impact
The financial burden on welfare recipients is substantial:
- Some businesses have been accused of taking 100% of a person’s welfare payment
- AGL is accused of wrongly taking $700,000 from about 575 vulnerable Australians, an average of $1,233 per person
- Origin is accused of wrongly taking $2.5 million from nearly 3,000 ex-customers
- In remote Indigenous communities, a rent-to-buy business charged a single mother of five $6,500 for a TV worth $1,400
- The wide use of Centrepay (600,000 users and 15,000 businesses) suggests the potential widespread financial harm.
What’s next?
GMP Law will continue to investigate the claims, gather evidence, and prepare for potential representative proceedings against the Commonwealth of Australia. The firm will also monitor the Government’s announced reform process and any developments in the regulatory landscape related to Centrepay.
If you have been affected by these issues, you are encouraged to register your interest to participate in the Centrepay class action.
Are you eligible for compensation?
You may be eligible to join the class action and claim compensation if:
- You are a welfare recipient who has used Centrepay
- You have experienced financial exploitation, unauthorised deductions, or other issues related to the service.
Even if you are uncertain about unauthorised deductions or other financial exploitation, you may still be eligible to join the class action if you were part of the Centrepay program.
To determine your eligibility and join the class action:
- Review your Centrepay statements.
- Document any financial distress or issues you have experienced.
- Register your interest with GMP Law.
Risk-free participation
There is no financial risk in registering with our firm and becoming a class member. We operate on a No Win No Fee basis. You will not incur any legal fees unless we win your case. If successful, the court may order the defendant to cover your legal fees and out-of-pocket expenses.
If the claim is unsuccessful, you will not be personally liable for any costs.
Take action today to ensure your rights are represented and to pursue the compensation you deserve.
We're here to help maximise your compensation
If you or someone you know has used Centrepay, we would like to hear from you. Your experience could play a crucial role in our investigation.
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