Consumer groups urge Asic to mount full investigation into collapsed funeral fund Youpla

Consumer groups have written to the corporate regulator, asking it to mount a full investigation into whether civil or criminal action can be pursued against people involved in Youpla, a funeral insurance group that has collapsed leaving at least 13,000 Indigenous people without coverage.

In a letter to the chair of the Australian Securities and Investments Commission, Joe Longo, the groups also ask that the regulator continue a court case against Youpla, alleging it engaged in misleading and deceptive conduct, even though the group has collapsed.

People left without the means to pay for funerals needed immediate compensation, the groups told the regulator.

Youpla, formerly known as Aboriginal Community Benefit Fund, collapsed in March, leaving the bodies of people who had paid into the scheme sitting in morgues because family members were unable to pay for funerals.

The group was previously owned and run by Ron Pattenden, who Guardian Australia revealed last week was legally able to derive more than $20m from its operation tax-free over a period of 10 years.

Brody said the regulator should also investigate whether there was insurance coverage held by the officeholders and auditors that could be drawn on.

However, he said that any legal proceedings should not delay compensation to policyholders.

Because Youpla was now in liquidation, Asic needs permission from the federal court to continue legal action in which the regulator alleges the company misled and deceived potential customers through behaviour that included holding itself out as Aboriginal-owned and operated.

Brody said there were ways of continuing the case without burdening policyholders.

The case returns to court on 16 June.