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ABC News
ABC News
consumer affairs reporter Amy Bainbridge and the Specialist Reporting Team's Loretta Florance

Months after funeral insurer's collapse left First Nations customers out of pocket, government offers funding to cover funerals

Mob Strong Debt Help's Bettina Cooper wants to see all Youpla customers compensated. (ABC News: Kirstie Wellauer)

After four months of uncertainty, customers of a failed funeral insurer have had a burden lifted off their shoulders, with the federal government promising to pay out claims while it investigates the company's demise.

In March this year, Youpla Group — formerly known as the Aboriginal Community Benefit Fund (ACBF) — went into liquidation, leaving about 14,500 First Nations people without cover.

To be eligible for the scheme, customers must have had an active policy on April 1, 2020 — the date at which Youpla Group stopped selling new policies because it was unable to obtain an Australian Financial Services Licence.

The assistance will be available until November 30, 2023.

"We understand the importance of Sorry Business and the devastating impact of this company’s failures on the community," Assistant Treasurer Stephen Jones told the ABC.

"We want to enter into consultations with community leaders on a resolution of the failed funeral benefit fund.

"We understand that may take a while, so as an interim measure we’ll pay claims for policyholders."

The government said payments would be commensurate with the cover the eligible policyholders held prior to the Youpla Group's collapse, typically worth $8,000. 

It anticipates up to 500 beneficiaries will be eligible for the payment before the program expires next November, and the government has budgeted about $7 million. 

Customers are being asked to register on the Treasury website to receive updates on the program. 

Earlier this year, an investigation by the ABC revealed the government had allowed the company to access welfare payments through Centrepay, despite warnings customers could lose everything if the company went bust.

Advocates have been calling on the federal government to step in to help customers. 

Mob Strong Debt Help financial counsellor and strategy lead Bettina Cooper, a Boandik woman, said the announcement was significant. 

“This is an important and welcome announcement for some people caught up in the tragic collapse of Youpla," she said.

“We look forward to further conversations around a fair resolution for the remaining policyholders who were exploited by Youpla and let down by repeated regulatory failures.

"There is a lot more work to be done before the tens of thousands of First Nations peoples harmed by Youpla can heal from decades of cultural and financial harm.”

Announcement ends months of worry

For customers like James Frederick Creed from Yarrabah in Far North Queensland, the announcement will provide some relief. 

Mr Creed — who held a total of six policies for his family over two decades — said the community had been in disbelief after the company's collapse in March. 

James Fredrick Creed says the government should have kept an eye on the Youpla Group. (ABC Far North: Christopher Testa)

Speaking to the ABC shortly before the announcement, he said government action was crucial. 

"If the government steps in and gives us something back, it will be a bit of a relief for a lot of us families around every community (the company's salespeople have) been to," he said. 

Data from financial counsellors showed Yarrabah was one of the communities that shelled out the money for policies. 

Yarrabah — a town with a population of just under 3,000 — contributed at least $1.7 million to ACBF/Youpla over the years. (ABC News: Brendan Mounter)

Of the 3,000 residents, 760 people had a policy with the company, pouring at least $1.7 million into its coffers. 

"They went from door to door," Mr Creed recalls.

"Every time they'd go from one house to the other, they'd say, 'Well you should sign up because your next-door neighbour signed up and the next-door neighbour after that signed up.'"

Daphne Naden, Kuku Yalanji elder and director at the Indigenous Consumer Assistance Network (ICAN), said she had also taken out policies with the company. 

“I didn’t want to leave my daughters with the financial pressure to find funds to bury me so I took out a plan with this funeral company thinking it was the right thing to do," she said.

"But this funeral company deliberately went out to exploit Indigenous communities.

“While there is still more to do, this news will help families grieving the loss of loved ones who should have been covered.”

Youpla's conduct in spotlight

Youpla has not been allowed to sign up new customers since April 2020, after the previous federal government changed licensing requirements, following damning evidence at the royal commission into banking.

Following the change, advocates expressed concern it was only a matter of time before Youpla went under, leaving thousands without cover.

The company is also the subject of a court challenge by the Australian Securities and Investment Commission (ASIC), which alleges it engaged in misleading and deceptive conduct between 2015 and 2018.

It will be the third time the company has been challenged by the regulator over its 30-year history — first in 1999 for misleading and deceptive conduct and again in 2003 for breaking federal anti-hawking laws.

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