The consumer watchdog has warned funeral directors against ripping off victims of the Youpla collapse by increasing the prices it charges to people who are eligible for payments from a government scheme.
People who are eligible for a payment from the scheme shouldn’t reveal this to funeral services providers while negotiating a quote, the Australian Competition and Consumer Commission said on Wednesday.
Funeral insurance business Youpla, formerly known as the Aboriginal Community Benefit Fund, collapsed in March, leaving bodies of loved ones in the morgue because Indigenous families were unable to pay for a funeral.
Last month, the Albanese government put an emergency scheme in place to pay victims of the collapse the same amount they were promised by the failed company.
ACCC deputy chair Delia Rickard said it had not “seen evidence of funeral parlours taking advantage of grant recipients at this stage” but issued the warning as a preventative measure after concerns were raised by consumer groups.
“So we wanted to go out proactively and give some warnings to the funeral sector, especially because we’ve done work on them last year, we put out a report and we had seen instances of misleading and deceptive practices back then.”
She said the warning to Youpla victims that they should not disclose that they might get money from the government scheme was also a shot across the bows of the funeral industry.
“We’ve seen in many government schemes over the years that when people know that somebody’s got the money, they will make sure they try and get it, so this is a preemptive warning,” she said.
She said many Youpla victims were in areas where there was not a choice of funeral directors but urged those who could shop around to do so.
“If you do have options, more than one, I think it is really important to get a few quotes and also ask about the minimum cost of funeral services covering only essential services when comparing services,” she said.
Youpla was founded by Ron Pattenden, who a Guardian Australia investigation found received $20m, tax-free, from the business, through companies in Vanuatu.
His luxury yacht, the Dream Catcher, was last seen moored off Port Vila, Vanuatu’s capital.
The ACCC has previously raised concerns about rip-offs by funeral directors.
In a report released in December, it said consumers may be misled because prices quoted for funeral services often failed to include all the costs that were actually charged.
For example, some quotes did not include GST, burial permits or death certificates.
Other issues raised by the ACCC in the report included unfair contract terms, misleading claims to be a local business and failing to properly deliver pre-paid funerals.