Government under pressure to help Aboriginal families after ‘predatory’ funeral insurer’s collapse

More than 120 legal, health and social services organisations have appealed to the federal government to provide urgent assistance to Aboriginal families left with no way to pay for their funerals, after their "predatory" insurer went into liquidation.

"This is one of the worst financial scandals we've ever seen," they say in an open letter to both major political parties, after reports that Aboriginal families have been forced to leave the bodies of their loved ones in the morgue while they raise the money to pay for a funeral.

Youpla Group, previously known as the Aboriginal Community Benefit Fund (ACBF), was a Gold Coast-based private business that for decades allegedly aggressively sold funeral insurance almost exclusively to Aboriginal people, including children and babies.

When Youpla collapsed in March, its member contributions totalled $39.2m, according to the liquidator, who warned there was just $11.9m left. More than 13,000 low-income Aboriginal people face losing all they have paid into the fund.

The Save Sorry Business coalition - which includes the consumer advocate Choice, the Australian Council of Social Services (Acoss), Anglicare and dozens of other non-government organisations - now wants the federal government to provide urgent assistance to families who need to pay for funerals, and policy holders who are "in the final stages of their lives".

"People have paid for funeral cover to ensure their families can carry out Sorry Business and grieve together - not to be left with the challenges of intergenerational debt and hardship," the group says.

State and federal governments have known for almost 30 years about Youpla's "misleading" conduct and "did nothing to prevent it", the coalition says.

"The harm created by Youpla is squarely a result of an inadequate regulatory framework. The harm created by Youpla should never have been allowed to continue," they say.

Kuku Yalanji elder Daphne Naden signed up to the fund in the mid-1990s for herself and her four daughters, who were young children at the time.

Naden, who is from Mossman in far north Queensland, has lost more than $15,000. Now, at age 65, she is worried about handing on a debt to her family.

"I'm 66 this year and I've got some health problems, but I don't want to leave my family to have to come up with all the funds," said Naden, a director at the Indigenous Consumer Assistance Network.

Naden said she trusted Youpla because they gave the appearance of being an Aboriginal-run community organisation.

"The idea of having a funeral fund for Aboriginal communities was something that I really took to, and thought was a good idea," she said.

"I had my four daughters who were very young children at that time. I thought it'd be good, just in case, to have them covered.

"I was committed to something that I thought gave me peace of mind. And then I turned around and found out there's no peace of mind whatsoever."

Labor says if it wins government it will establish an inquiry to look into the role played by Youpla's directors and the bodies that regulated them - the Australian Securities and Investments Commission and NSW Fair Trading.

The party says it wrote to the government in 2019 warning that Aboriginal families would be "ripped off twice" if Youpla collapsed. The government did not respond to the letter, the shadow assistant treasurer Stephen Jones said.

"Clearly, whoever wins the next election is going to have to deal with this issue, and face up to the fact that the government has been negligent," Jones said.

However, the Coalition says it "finally put a stop to ACBF and their predatory behaviour" following the banking royal commission.

"My first priority is that the people responsible are held accountable," the financial services minister Jane Hume said. "To this end, ASIC is taking legal action against ACBF alleging misleading and deceptive conduct.

"Secondly, I want to make sure that the people affected are aware of the help available across the country. No Australian will be left unable to bury their loved one with dignity."

The Coalition has suggested there are state-based organisations that can help meet funeral and burial costs.

The Australian Financial Complaints Authority has received more than 700 complaints against Youpla since 2018, and issued 178 decisions against the group for "misleading and deceptive conduct".

Meanwhile, community organisations and financial counsellors say they have been "inundated" with hundreds of calls a day since the collapse.

"There are no legal options here which would help get back their money or even pay for their funeral," said Mark Holden, a Dunghutti man and solicitor at Mob Strong Debt Help.

"It is especially hard talking to Elders who have given so much of themselves to community. They deserve a dignified farewell in accordance to Sorry Business protocols."