First Nations community organisations and consumer advocates are calling on the Australian Government to help policyholders who have been hit hard by the sudden collapse of Aboriginal Community Benefit Fund (Youpla).
About 15,000 Aboriginal and Torres Strait Islander policyholders and their families have been left unable to pay for funerals and sorry business after three of Youpla’s four funds were placed into liquidation on March 11.
The Aboriginal Community Benefit Fund No 2 Pty Ltd had gone into liquidation nine days earlier.
Financial Rights Legal Centre’s Aboriginal and Torres Strait Islander-led Mob Strong Debt Help service, the Indigenous Consumer Assistance Network, Victorian Aboriginal Legal Service, Consumer Action Koori Help, Bush Money Mob, CHOICE, and Financial Counselling Australia have united to call on the Australian Government to protect the victims of this failure.
Community organisations have been overwhelmed by thousands of distressed callers.
Mob Strong debt help solicitor Mark Holden said the Federal Government should urgently take measures to help policyholders who have died since the collapse of Youpla or who pass away in coming months depart with dignity.
“First Nations policyholders have sacrificed and worked hard to put money aside for sorry business and have now been left with the risk of unimaginable intergenerational debt as a result of Youpla’s inability to follow through on its promise,” he said.
Mr Holden said the Federal Government had known for a long time allegations Youpla was misleading disadvantaged consumers.
“Youpla’s practices were exposed at the Banking Royal Commission, where Commissioner Kenneth Hayne noted that First Nations people, especially those living in regional and remote communities, were sold policies of little value to them, through predatory sales tactics,” he said.
Indigenous Consumer Assistance Network director and Kuku Yalanji Elder Daphne Naden said the funeral fund deliberately exploited Indigenous communities.
“When is the government going to stand up and support us, like other Australians,” she said.
“It’s sad that some people are so rotten that they do these things and that the government allows it.”
Federal Financial Services Minister Jane Hume did not indicate whether the government would intervene to assist policyholders when asked by the National Indigenous Times.
A spokesperson for the Minister said after the Financial Services Royal Commission found evidence significant harm could be caused to vulnerable consumers by some funeral expense policy providers, a requirement that all funeral expense policies be sold by a licenced provider was introduced.
“As a result, no new funeral expense policies have been sold by unlicenced providers, including ACBF/Youpla, since April 1, 2020,” the spokesperson said.
“The Government has also introduced design and distribution obligations that will further prevent this inappropriate selling of such policies.”
The funds are regulated under New South Wales legislation, with NSW Fair Trading as the regulator.
It is understood that the Australian Securities and Investments Commission has been seeking to engage with NSW Fair Trading on the issue.
ASIC has also taken legal action against ACBF/Youpla alleging misleading and deceptive conduct, following previous actions taken by ASIC in 1999 and 2004.
The case is currently before the court.