Lawyers fighting to support more than 17,000 Indigenous people affected by the collapse of funeral insurer Youpla say the situation is now dire, with “bodies in morgues who don’t have anyone to pay for their funeral.”
Over 125 organisations have signed an open letter to Federal Treasurer Josh Frydenberg, urging the Government to step in and remedy the losses suffered by those who took out funeral insurance with Youpla, formerly known as Aboriginal Community Benefit Fund (ACBF).
The company is a private insurer who operated since the early 1990s selling funeral insurance products to Indigenous communities. Many First Nations people bought this insurance believing that ACBF was an Aboriginal owned organisation or service.
ACBF also asserted that its policies were not financial products. However, in 2004, in proceedings commenced by the Australian Security and Investments Commission (ASIC), the Federal Court found that the policies were “financial products”. That meant that ACBF required an Australian Financial Services Licence to sell those policies.
In 2018, the Financial Services Royal Commission interim report found ACBF’s conduct may be misleading under the ASIC Act.
“That opened floodgates for people lodging complaints demanding a refund on their premiums because they thought ACBF was an Aboriginal-owned organisation”, Mark Holden, solicitor at the Financial Rights Legal Centre, told LSJ.
“ACBF’s response to all this was that they’re not going to refund anything. ACBF argue people should’ve known it was not an Aboriginal organisation because they had a disclaimer in the document. However, having this in the ‘fine print’ did not offset the massive amounts of marketing they were doing on this which suggested otherwise.”
In 2018, ACBF changed their name to Youpla to rebrand itself. But the damage had already been done.
After findings from the Australian Financial Complaints Authority on individual, ACBF was ordered to refund premiums to 178 complainants, with more than 500 complaints still pending before the companies went into liquidation.
The liquidators said two of the funds don’t have enough money to refund premiums.
This led to grievances from policyholders, who are now worried they have lost what they thought were secured savings.
“Some people have paid tens of thousands of dollars over decades, keeping to their side of the bargain, hoping to have a dignified ending to life. Some of those who have been through a lot of trauma, have now been told that that’s all for naught, they lost everything”, Holden said.
He questions why the government did not properly regulate and supervise ACBF throughout this time.
“Now we’re at a critical mass point whereby 17,000 current policyholders and at least 13,000 former policyholders have lost out here,” Holden said.
Another problem was Youpla/ACBF’s aggressive sales tactics. Targeting, for example, young mothers with the intent to convince them to add their children to the policies for extra premiums and adding clauses that exclude coverage in case of suicide – particularly damning as suicide affects First Nations communities at a more significant rate than non-Indigenous communities.
Holden says the urgency is now in securing immediate funds to assist those currently caught in a dire situation, telling LSJ, “there are bodies in morgues who don’t have anyone to pay for their funeral, and we’ve been getting a lot of calls from elders who don’t have much longer to go”.
He says the Financial Rights Legal Centre believes the Federal Government has an opportunity to make things right after allowing Youpla to operate for three decades, targeting vulnerable groups, and leaving them disadvantaged to the tune of millions.
“No matter what the mob have gone through, at the very least they deserve to have a dignified end, in accordance with sorry business culture”.