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Policyholder refunds for Aboriginal Community Benefit Fund Pty Ltd No. 2 Pty Ltd at risk

***Aboriginal and Torres Strait Islander people who have funeral insurance policies with Aboriginal Community Benefit Fund Pty Ltd should contact Mob Strong Debt Help on 1800 808 488 as soon as possible.***

Aboriginal and Torres Strait Islander people who are owed refunds for policies held with Aboriginal Community Benefit Fund No. 2 Pty Ltd, owned by Youpla, should lodge a proof of debt form by 22 December 2021 for their debt to be considered by the fund’s administrators.

Administrators Robson Cotter Insolvency Group were appointed to Aboriginal Community Benefit Fund No. 2 Pty Ltd on November 24.

Mob Strong Debt Help Solicitor Mark Holden said Mob Strong was liaising with the administrators to ensure the rights of consumers were protected.

“We implore ACBF’s administrators to ensure Aboriginal and Torres Strait Islander people are paid the refunds they are owed in full,” Mr Holden said.

Mr Holden said Mob Strong was seeking clarity on the future of two other Youpla funds: the Aboriginal Community Benefit Fund (known as Fund 1) and ACBF Funeral Plans Pty Ltd (trading as Aboriginal Community Funeral Plan).

Many disadvantaged Aboriginal and Torres Strait Islander consumers are owed refunds for premiums paid to companies in the Youpla group under the false belief they were an Aboriginal community owned and controlled organisation at the time they took out their policy.

These consumers were also not warned that their premiums would likely exceed any benefit they may get and not adequately warned that they had to keep paying premiums until they died or they would not be covered. 

Mr Holden said there were likely many Aboriginal and Torres Strait Islander people who were unsure what to do.

“Policyholders must get in touch with Mob Strong Debt Help on 1800 808 488 as soon as possible for assistance,” Mr Holden said.

Financial Rights Legal Centre Chief Executive Officer Karen Cox said she hoped the Australian Government would step in to ensure policyholders in ACBF Fund No. 2 were compensated, if they did not receive what they were owed in full as part of the administration process.

“Policyholders who believe they were misled and were seeking a refund of their premiums must also lodge a complaint to the Australian Financial Complaints Authority as soon as possible,” Ms Cox said.

“Anyone who was misled into joining Fund 2 and finds themselves out of pocket as a result of the administration ought to be included in any compensation scheme of last resort.”

Financial Rights has represented 11 policyholders in ACBF Fund No. 2 matters.

The Australian Financial Complaints Authority found in favour of seven of these clients in separate determinations. However four of these clients are still waiting for their refunds in accordance with AFCA’s determinations. One matter is still before the AFCA and another three matters are in internal dispute resolution.

Background

Sorry Business (funerals and related cultural activities) is of special, cultural significance to Aboriginal and Torres Strait Islander communities.  

Aboriginal and Torres Strait Islander communities appear to have been disproportionately harmed by funeral policies, particularly those offered by the Aboriginal Community Benefit Fund now known as Youpla. 

Youpla is the parent company for three separate companies which offer funeral insurance:

  • Aboriginal Community Benefit Fund (known as Fund 1);
  • Aboriginal Community Benefit Fund No. 2 Pty Ltd (Fund 2); and
  • ACBF Funeral Plans Pty Ltd (trading as Aboriginal Community Funeral Plan).

Funeral policies are often of limited value. Payout amounts are often small and there are high rates of cancellations. 

Youpla is a private company, historically it was not Aboriginal owned or managed. For decades, Youpla sold funeral insurance and funeral expenses policies marketed solely to Aboriginal and Torres Strait Islander consumers through unsolicited sales techniques in the Aboriginal and Torres Strait Islander community.  

Youpla used the trading name ‘Aboriginal Community Benefit Fund’, Aboriginal sales staff and Aboriginal motifs in their marketing to appeal to Aboriginal and Torres Strait Islander consumers.  

Following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s recommendation, the Australian Government removed the regulatory loophole which enabled funeral expenses products to avoid regulation under the Corporations Act.  

Since the Royal Commission, Youpla has rebranded itself and stopped selling their products.