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Mob Strong Fact Sheet: Funeral insurance
Mob Strong Debt Help

Does your client have or had a funeral insurance policy with the Aboriginal Community Benefit Fund?

If you have a client who has or has had a funeral insurance policy with the Aboriginal Community Benefit Fund (ACBF), now owned by Youpla, and was misled into thinking ACBF were Aboriginal owned and managed when they signed up, they should seek advice about their options.

These could include lodging a complaint with ACBF and the Australian Financial Complaints Authority (AFCA) if they have suffered a loss or damage.

If they want to make a complaint, you can use our resources and expertise to help your client.

What is ACBF?

ACBF provided funeral insurance products to their clients under three different funds:

  1. Aboriginal Community Benefit Fund Pty Ltd (up until 2004 ) “Fund 1”
  2. Aboriginal Community Benefit Fund (No 2.) Pty Ltd (up until 2004) “Fund 2”
  3. ACBF Funeral Plans Pty Ltd (from 2004) “the Plan”

A person pays a premium to ACBF to be covered for the costs of a funeral. This may be for their own funeral or that of a relative such as a parent, brother or sister, or child. Each of the funds is structured differently, and may have a lot of confusing terms and conditions.

What is the issue?

We have been concerned for a few years, that consumers have had difficulty with the way ACBF’s products were sold, their affordability, the quality of the cover and difficulties consumers faced when making claims.

We have argued the products are insurance. When you sell insurance you have certain legal obligations, including to act in utmost good faith with a client, as required by the Insurance Contracts Act 1980 and the general law.

This duty includes not misleading the client and taking adequate steps to explain the product to the client, including things like:

  1. The ownership of the organisation, which at times has not been owned or run by Aboriginal people, but may have been advertised as such;
  2. The cost of the insurance;
  3. That the payment in the event of a claim could only be paid for funeral costs, meaning a person may get less if the funeral costs are less than they paid in premiums; and
  4. The likelihood the person could pay more than the benefit is worth.

What do I need to do if I have a client like this?

Step 1: Check they have or had a policy with ACBF

Ask if your client has or had a funeral insurance policy with ACBF. If so, which fund.? Did they pay for their family member’s policies? 

Check if your client have any documents relating to their policy or contact ACBF or Youpla to obtain documents. 

Step 2: Explain to your client the situation with ACBF

It might be possible your client is finding out for the first time that ACBF was not Aboriginal owned or managed at the time they signed.

They may not have realised they have or could be paying more in premiums than the benefit is worth. Perhaps the product does not work how they thought.

Or they may not have realised the product was cancelled.

Step 3: Ask your client what they want to do about this

Your client might want a refund on the basis that they would not have bought the product had they known how it worked.

But also they might want to do nothing or something else, like keep the policy but on different terms.

Step 4: Get instructions from your client

It is important you get instructions about your client’s experience. This is a list of possible questions that can help in determining if the person may have a good claim:

  1. Is the client vulnerable or were they when they signed up? What is their level of literacy, education, work history and experience with financial products?
  2. How did the client hear about ACBF? It could be word of mouth, advertisements or even door-to-door selling.
  3. Did the client believe ACBF was Aboriginal owned and managed at the time? If yes, what gave them that impression?
  4. Does your client have copies of any marketing materials used at the point of sale or remember any sales pitches used by ACBF representatives that gave the above impression (advertisements, organisation name, logos, newsletters, word of mouth)?
  5. Did your client sign anything and, if so, what do they remember signing or did any ACBF representative explain what they were signing (if your client has any documents from ACBF or Youpla, ask them if they mean anything to them)?
  6. Ask the client if they have ever heard of, or understood, the following disclaimer:

The Plan is run by a private company which is not connected with or sponsored by any governmental or similar body or any Aboriginal organisation”

Step 5: Complete sample letter and send to the internal dispute resolution department of ACBF or Youpla

You can contact Mob Strong Debt Help for free legal help with completing a letter raising a dispute or requesting documents.

Once you send the dispute there is a time frame of 45 days for ACBF to respond.

Step 6: Escalate to AFCA if they do not resolve or their response is unsatisfactory

The Australian Financial Complaints Authority is a free dispute resolution body and any determination made is binding on ACBF as a member.

Before lodging a dispute you can ask for advice from Mob Strong
Disputes can be lodged online at AFCA.

If you need any advice or help to make a complaint then please call us for free legal assistance on free call 1800 808 488.