AI-generated images are being used to fraudulently claim thousands of green certificates under Victoria’s flagship energy saving scheme, which has been wracked by rogue operators seeking to cash in on the taxpayer-funded program.
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which → generate → program
Nearly 20 businesses have been suspended or cancelled from the scheme over the past two years, some of which have collapsed into liquidation after being penalised by the regulator, leaving households owed millions in missing deposits and without warranties for hot water systems and airconditioners.
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some → suspend → systems
In an extreme example of how the scheme is being rorted, an employee at a sustainability company is being chased by his employer for allegedly transferring $5.9 million worth of carbon credits to his own business.
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employee → rorte → business
The Victorian Energy Upgrades (VEU) program encourages installers to more cheaply electrify or improve the energy efficiency of homes, with consumers offered discounts on products including hot water systems, refrigerators and televisions.
But an investigation by The Age – using company records, enforcement notices and interviews with consumers and installers – paints a picture of widespread misbehaviour in the $572 million program.
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investigation → encourage → program
The integrity of VEU, which the government boasts has helped 2.4 million households and 180,000 businesses, will become increasingly important next year when the government will switch all solar rebates it provides on to the program.
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it → boast → program
Over the past six months, the rise of doctored images has become a particular issue for the Essential Services Commission, which oversees the scheme, as artificial intelligence has made it easy to create realistic fake images.
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it → doctor → images
Dodgy installers are increasingly using AI to provide photographic evidence they have installed air conditioners, lights, heat pump or weather seals, which they then use to claim Victorian energy efficiency certificates valued at $83 each.
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they → use → 83
In September, the regulator ordered a business to surrender $230,000 worth of carbon credits after alleging they made false claims and submitted staged photos.
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they → order → photos
Another company was banned from the scheme in August after the commission alleged they provided false information, including doctored photos, and had to surrender 1228 certificates valued at more than $100,000.
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they → ban → 100,000
In September last year, a company that claimed carbon credits for weather seals and shower heads was alleged to have manipulated photos and even “incentivised” a customer to back their false claims, according to the Essential Services Commission.
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that → claim → Commission
Commission chair Gerard Brody said the regulator had ramped up its efforts to stop bad behaviour over the past 18 months, particularly as the program had grown and expanded into more complex energy upgrades.
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program → say → upgrades
In the last financial year, he said, 10 businesses had been kicked out of the scheme.
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businesses → say → scheme
“In the early days of the program, lighting upgrades and weather sealing were the dominant activities, whereas in recent years there’s been significant growth in installation of energy efficient airconditioning units and hot water systems,” Brody said.
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Brody → say → units
“We’ve conducted thousands of post-installation compliance checks, including inspections and consumer phone audits, and successfully used data and technology to identify non-compliance.”
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We → conduct → compliance
Brody confirmed the presence of “bad actors” looking to cheat the system, including using artificial intelligence.
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Brody → confirm → intelligence
“But we have sophisticated technology, too, and have had success using it to identify breaches,” he said.
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he → have → breaches
“We’ve also strengthened our accreditation processes to address applicants using AI to disguise their lack of knowledge or capability, including by requiring some applicants to attend in-person interviews.”
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We → strengthen → interviews
One of the biggest issues for Victorians purchasing affordable airconditioners and heat pumps has been the large companies who have gone bankrupt, taking deposits and warranties with them.
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who → purchase → them
Liquidator reports obtained by The Age show Cyanergy, which stopped trading in March, owes $7 million to unsecured creditors – mostly households who have paid for energy-efficient products.
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who → obtain → products
Before its liquidation, the company had been suspended by the regulator after installers working for the company allegedly installed heat pumps with wiring issues that represented a safety risk.
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that → suspend → risk
In 2020, the company received a warning for allegedly submitting falsified invoices claiming products had been installed.
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products → receive → invoices
In its final report, liquidator Mackay Goodwin said a large part of the $5.2 million in cash owed was for customers over unpaid services such as installations and incomplete orders.
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part → say → installations
Another $1.9 million was owed to the tax office and other unsecured creditors.
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million → owe → office
But because the company is in liquidation, it cannot process any refunds or fix any defective work.
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it → process → work
Meeting minutes from a committee of inspection, chaired by the liquidator, alleged Cyanergy’s director ordered data be “wiped” from laptops recovered from the firm’s chief financial officer and human resources team.
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data → meet → officer
The committee also identified more than $1 million worth of transactions sent to an overseas entity, which was subject to further investigations.
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which → identify → investigations
Cyanergy owes another $9 million to creditors including Judo Bank.
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Cyanergy → owe → Bank
A linked company, Smart Lifestyle Australia, also went into liquidation in March.
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company → link → March
It served as a manufacturer that provided Cyanergy with solar panels, inverters and batteries.
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that → serve → panels
It has liabilities of $8.8 million, Mackay Goodwin found, of which $8 million is owed to Judo Bank through loans and guarantees.
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million → have → loans
Another company, Glower, which sold battery, solar, heating and water systems, went into liquidation in February and is estimated to owe unsecured creditors $4.28 million.
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which → sell → million
Facebook pages for Glower and Cyanergy, seen by The Age before they were removed, show customers repeatedly asking the businesses to return their deposit or fix defective work.
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customers → see → work
One customer, Carol Edwards, said her hot water system from Glower started leaking the moment she bought it.
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she → say → Glower
But when she contacted the company for a repair it had gone under.
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it → contact → repair
“It’s just the biggest ripoff under the sun,” she said.
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she → ’ → sun
Brody said he sympathised with the Victorians who had been left out of pocket, particularly those that paid for work that was never started or completed.
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that → say → work
“I also recognise the frustration and uncertainty customers can face when trying to get the work completed or recover their money,” he said.
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he → recognise → money
Brody said Consumer Affairs Victoria could help customers.
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Victoria → say → customers
He suggested anyone who had paid for incomplete services by card could contact their bank to see if they could access a chargeback to refund their money.
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they → suggest → money
He said some customers may also be able to claim warranties for defective products through the manufacturers, rather than the installers.
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customers → say → manufacturers
…and 8 more, not listed.
The Aporia
