About 15,000 First Nations policyholders suffered losses
A group of community organisations have urged the Australian government to assist First Nations consumers in the wake of the sudden failure of the Aboriginal Community Benefit Fund (trading as Youpla).
According to a 17 March media release published by the organisations, for decades Youpla used unsolicited sales techniques to market and sell funeral insurance and expense policies to the Aboriginal and Torres Strait Islander community. On 11 March, three of Youpla’s four funds went into liquidation, leaving approximately 15,000 First Nations policyholders and their families unable to pay for funeral and sorry business expenses.
Aboriginal Community Benefit Fund No 2 Pty Ltd had already gone into liquidation on 2 March. ASIC announced in October 2020 that it had commenced proceedings against Youpla, alleging that the fund engaged in misleading and deceptive conduct between January 2015 and November 2018.
The case is currently before the Federal Court.
In the meantime, the group of community organisations has called for the government to cover the loss suffered by Youpla policyholders, saying the issue was clearly identified in the 2018 Royal Commission into misconduct in the banking, superannuation and financial services industry.
“Youpla’s conduct has continued in plain sight for decades. 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,” said Mark Holden, a solicitor at the Financial Rights Legal Centre’s Mob Strong Debt Help service.
He pointed out that the Australian Financial Complaints Authority had consistently flagged how First Nations people had been tricked into purchasing a financial product operated by and geared towards helping Aboriginal people. Youpla is historically not Aboriginal owned or managed.
“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,” Holden said. “They deserve to know how this has happened and why they have lost their right to funeral benefits that many people have been paying for decades.”
The Aboriginal and Torres Strait Islander-led Mob Strong Debt Help is among the organisations leading the call. It is joined by the Victorian Aboriginal Legal Service, the Indigenous Consumer Assistance Network, Consumer Action Koori Help, Bush Money Mob, CHOICE and Financial Counselling Australia.
Consumer Action Legal Centre’s Aboriginal policy officer Samantha Rudolph said that the Youpla situation had been aggravated by “a government that ignored the problem for years, and has failed in its duty of oversight and regulation.”
