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The Guardian - AU
The Guardian - AU
Sarah Collard

Youpla profits surged after it was approved for federal government’s automatic payments system

Youpla logo
New data obtained through liquidators and independently analysed shows 105,290 people bought ACBF-Youpla policies, many more than first believed. Photograph: Youpla

New data has revealed disgraced funeral fund ACBF-Youpla’s profits skyrocketed by tens of millions of dollars after the company was approved for the federal government’s automatic payments system Centrepay.

ACBF-Youpla collapsed in March 2022 leaving thousands of Aboriginal people, some of them elderly and in palliative care, without the means to pay for funerals. Families resorted to crowdfunding and some were forced to leave their loved ones’ bodies in the morgue while they raised the funds.

ACBF-Youpla targeted Indigenous people through aggressive advertising, using the distinctive red, black and yellow colours of the Aboriginal flag, giving away stuffed toys and colouring books for children, and conducting door-to-door sales as well as holding stalls at community events.

Bettina Cooper, a Boandik woman and Aboriginal financial counsellor at Mob Strong Debt Help, said the new data, which was obtained through liquidators and independently analysed, has revealed the scale of how many Indigenous people were impacted.

The data, provided to the Guardian, reveals that between 1992, when ACBF-Youpla first began operating, through to liquidation in April 2020, First Nations families lost $174m in payments to the disgraced company.

Using personal unique identifiers, the data shows 153,943 individual policies were sold to 105,290 First Nations people – many more than the estimated 30,000 people first believed to have been impacted over the funeral fund’s lifetime.

“It really shows the length and breadth of harm that has been done. This was a company that affected a large percentage of the First Nations population. They insidiously harmed the ability for First Nations people to meet the expenses and burden of Sorry Business,” Cooper said.

Centrepay is a voluntary payment system run by Services Australia that allows people to have their bills automatically deducted from their income support payment. The service was generally reserved for essentials, such as rent (particularly for those in government housing) and gas and electricity payments, but it was extended to include businesses and organisations offering goods and services.

A page from a 2002 ACBF-Youpla newsletter referring to Centrepay
A page from a 2002 ACBF-Youpla newsletter referring to Centrepay. Photograph: ACBF-Youpla newsletter

Once Centrepay was approved, ACBF-Youpla’s profits soared. Between 1992 and 2001, the company received about $5m in payments. After Centrepay was approved in 2001, it garnered $169m in payments.

“Initially it was only for rent and then bills, then they gave it the tick of approval. They basically told the nation that Aboriginal funeral insurance was an essential product, that this was a good company. They opened the door wider and ACBF-Youpla was one of the first organisations to get through that door,” she said.

Cooper said this was a turning point and allowed the company to legitimise the scheme and promote it through marketing leaflets.

“They used it in newsletters and the like, you know, saying ‘Centrepay is the best way to pay’.”

Cooper said if the automatic system was not approved, the company would not have been able to survive. “There’s no way the company would have lasted this long, but because they’re on Centrelink they had a guaranteed income stream.”

The government finally removed ACBF-Youpla from the Centrepay system in 2017, after repeated breaches of regulation and compliance.

It was only when ACBF-Youpla’s conduct was exposed during the 2018 banking royal commission that its licence to sell new products was revoked.

Mark Holden, a Dunghutti man and solicitor with Mob Strong Debt Help, said regulators failed to identify the red flags with the company before it was too late. Once compliance checks and regulations were required, the company failed to meet them. “It was just a matter of when, before they were going to collapse, once they were required to be regulated,” Holden said.

Save Sorry Business and Mob Strong are urging the government to provide a $300m scheme for affected policyholders, arguing it is an achievable scheme for the commonwealth because it’s less than that paid for the recent upgrades to the Australian War Memorial.

“The rollout should be actually less than that, based on the fact they’ve already established an interim solution,” Cooper said.

But she said it was critical that the scheme also allowed options such as the choice between reimbursement of money paid over decades, replacement funeral bonds or savings plans.

Under an emergency scheme announced by the federal government in November, people who held policies with ACBF-Youpla as of 1 April 2020 will receive a payout for funeral expenses equal to what they were originally promised by the company.

The minister for financial services, Stephen Jones, acknowledged the “massive emotional and financial impact” of the collapse, and labelled the company a “corporate disgrace”.

In a statement, he said the federal government had acted to establish an interim program once elected with about 200 families accessing the scheme, which has paid out $1.6m.

He said the commonwealth was working to develop a longer-term solution for families. “We are working with community representatives to develop and deliver a longer-term resolution to support those affected by Youpla’s collapse”.

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