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The Guardian - AU
The Guardian - AU
Lorena Allam

Youpla funeral fund: compensation scheme to begin for Aboriginal victims of predatory insurer

Minister for Indigenous Australians Linda Burney
Minister for Indigenous Australians Linda Burney and financial services minister Stephen Jones say the ACBF-Youpla compensation program is a ‘interim arrangement’ while further steps are investigated. Photograph: Mick Tsikas/AAP

Thousands of Aboriginal families left without the means to pay for funerals after the collapse of the predatory insurer ACBF-Youpla will be able to apply for financial relief when an emergency scheme begins on Wednesday.

Under the scheme, announced by minister for Indigenous Australians, Linda Burney and financial services minister Stephen Jones, people who held policies with ACBF-Youpla as of 1 April 2020 will receive a payout for funeral expenses equal to the one they were originally promised by the company.

The scheme is an interim measure designed to provide urgent relief for families that need to pay for funerals now. Guardian Australia revealed in June that at least 31 families have been left without the means of paying for funerals, or had to leave their loved ones in the morgue while they raised the funds after the company collapsed in March, taking with it all they had paid into the fund.

The number of families in this situation has since risen to 51, according to consumer advocates with the Save Sorry Business coalition, representing thousands of clients across Australia.

The interim scheme will be open until 30 November 2023. Eligible families will be able to register on the Treasury website from 7 September. People applying will need to provide documents to support their application, and payments will be made within two weeks of approval, according to the Save Sorry Business coalition.

The coalition of consumer advocates welcomed the scheme as an “important first step” but said an enduring solution was needed for the estimated 30,000 others they say have been affected over the three decades that ACBF-Youpla was allowed to operate.

“We are glad to see this emergency program open for the many grieving families who have been harmed by the collapse of Youpla. Sorry Business is a fundamental cultural practice that was stolen away and replaced with financial and cultural crisis,” Lynda Edwards, Wangkumara – Barkandji woman and financial capability coordinator at Financial Counselling Australia, said.

“The Save Sorry Business Coalition and many other First Nations advocates continue our deep conversations with Ministers Linda Burney and Stephen Jones to achieve an enduring resolution for the families and communities harmed. No one should be left behind,’” she said.

It comes as the Australian Securities and Investments Commission investigates the conduct of current and former directors of the funeral fund, including the founder, Ron Pattenden, who is now believed to be in Vanuatu.

Asic is also pushing ahead with a lawsuit accusing the company of misleading clients.

The collapse left thousands of mostly low-income Aboriginal people, some of them elderly and in palliative care, without coverage. People had paid between $3,000 and $30,000 into the fund during its time of operation, from 1992 to 2022.

ACBF-Youpla targeted Indigenous people using marketing materials in the distinctive red, black and yellow colours of the Aboriginal flag, including stuffed toys and colouring books for children, and by conducting door-to-door sales.

Guardian Australia reported in May that senior managers knew of an allegation of at least one salesperson’s aggressive tactics. Senior managers were notified in an email from a staff member, alleging they had witnessed the salesperson using racist slurs to describe Aboriginal clients, and alleging the salesperson told them: “We aren’t here to show them respect or dignity. We are here to get money from them.”

At its peak, ACBF-Youpla had about 25,000 members. In some communities, about 30% of people, including children and babies, had been signed up to the fund. The worst affected was the north Queensland town of Yarrabah, where 786 people have been left facing the loss of everything they had paid into the fund.

In a joint statement to Guardian Australia, Burney and Jones said the government was delivering on its commitment to support the families of deceased policyholders, so they can get on with sorry business.

What is ACBF/Youpla

    • The Aboriginal Community Benefit Fund (ACBF) was a Gold Coast-based private business that for decades aggressively sold funeral insurance almost exclusively to Aboriginal people, including children and babies
    • At its peak ACBF had about 25,000 clients. Trading as Youpla, it had 13,000 clients at the time of liquidation, all of whom face losing  the money they paid in
    • Contributions of active members to the three funds totalled $39.2m 
    • The liquidator, SV Partners, says there is just $11.9m left – the largest fund (Fund 3) has just $207,000 
    • ACBF-Youpla was investigated by NSW’s Department of Fair Trading in 1992 and by the financial services regulator, Asic, in 1999, 2004 and 2014, but the business was allowed to continue
    • The company became a case study at the banking royal commission in 2018
    • Changes implemented following the royal commission led to Youpla being unable to sell to new customers without a licence
    • The financial ombudsman, Afca, has received 700 complaints about Youpla group since 2018, and issued 178 decisions to date, all in favour of complainants citing misleading or deceptive conduct 
    • Afca estimates it has awarded more than $1.4m in compensation, but 61 determinations remained unpaid, worth around $500,000

They said the program has been developed in consultation with consumer advocates and First Nations representatives “to ensure it meets the needs of families who have been impacted by the collapse of the Youpla Group”.

“These are interim arrangements the Government is establishing while it investigates what further steps are required to bring resolution in relation to the Youpla Group collapse,” they said.

The government said it will continue consulting widely on those further steps while these interim arrangements are in place.

Upwards of 13,000 mostly low-income Aboriginal people were in the fund when it collapsed.

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