Advocates for thousands of Aboriginal people exploited by a predatory funeral fund say previous federal governments legitimised the company by authorising millions in automatic policy payments from welfare income.
Even after Aboriginal Community Benefit Fund, ACBF-Youpla, was kicked off the government system, it continued to reap the benefits. In 2017 alone, the company pocketed more than $3.4m from cancelled policies, new data shows.
The Save Sorry Business coalition, representing thousands of policyholders, is now calling for a $300m federal compensation scheme for those affected by the company’s predatory practices and its financial collapse.
Centrepay was set up by the Howard government so Indigenous people could make automatic payments for essentials like rent or food from their fortnightly welfare income.
ACBF-Youpla, which collapsed earlier this year, was the only funeral fund granted access to the Centrepay system.
“For 16 years, Youpla had the federal government’s stamp of approval,” said Wangkumara-Barkandji woman Lynda Edwards from the Save Sorry Business coalition.
“First Nations families were paying for their funeral insurance policies before they paid for food, clothing or school expenses. The current federal government has a responsibility to right that historical wrong and make amends to those who suffered and are still suffering today.”
The collapse of ACBF-Youpla left thousands of mostly low-income Aboriginal people, some of them elderly and in palliative care, without any means of paying for a funeral.
As liquidators sift through the remaining assets, it is unclear if those affected – estimated to be about 30,000 Aboriginal people – will ever receive a refund.
People had paid between $3,000 and $30,000 into the fund during its time of operation from 1992 to 2022.
Corporate regulator Asic is seeking a record $7.5m penalty against the insurer for its “deliberate and knowing conduct of preying on vulnerable Aboriginal people”. Asic alleges the company engaged in deceptive and misleading conduct between 2015 and 2018.
In September, the federal government set up an interim relief scheme amid reports that people were forced to leave their loved ones in the morgue while they raised money for funerals. The scheme is open until 30 November 2023.
Advocates argue governments were aware of concerns about ACBF-Youpla for decades.
In October 2007, Centrelink investigated ACBF, which was also found by Asic to have breached the anti-hawking provisions of the Corporations act by selling insurance policies door-to-door. But the company was allowed to remain on the Centrepay system until the Turnbull government finally kicked it off in 2017.
ACBF-Youpla cancelled policies if a holder missed more than two successive payments.
New data from the liquidator shows there was a 300% increase in such cancellations when ACBF-Youpla was removed from Centrepay.
Centrepay was critical to ACBF-Youpla’s exploitative business model, Bettina Cooper of Save Sorry Business told Guardian Australia.
“Because ACBF was the only insurance fund ever allowed on Centrepay, it gave them the tick of approval. It meant people thought this was a good product because the government allowed it on Centrepay,” Cooper said.
“It showed that ACBF-Youpla’s premiums were unaffordable, but that was masked by Centrepay.”
Cooper said she was hopeful that the current Albanese government was listening to calls for compensation. “I’m confident they’re willing to consult and I look forward to what the outcome of it will be,” she said.
Cooper said the average cost for a funeral was estimated to be $12,000 and a payout of that amount would significantly reduce financial hardship for affected families.
