AFCA finds Youpla firm ACBF guilty of misleading Aboriginal policyholders

AFCA finds Youpla firm ACBF guilty of misleading Aboriginal policyholders | Insurance Business

AFCA finds Youpla firm ACBF guilty of misleading Aboriginal policyholders

The Australian Financial Complaints Authority (AFCA) has found funeral insurance provider Youpla guilty of misleading Aboriginal policyholders via its subsidiary ACBF Funeral Plans Pty Ltd (ACBF).

The AFCA found, in two separate cases filed by the Financial Rights Legal Centre and Victorian Aboriginal Legal Service respectively, that ACBF misrepresented itself as an Aboriginal owned and controlled, non-profit, community organisation that would provide funeral expenses insurance to the Aboriginal and Torres Strait Islander community.

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It also found that the ACBF failed to meet the required standards of education, in that some complainants were unaware that their insurance premiums would go up with age or that their total premiums paid would likely exceed the benefit payable. 

Both the Financial Rights Legal Centre and the Victorian Aboriginal Legal Service have applauded the AFCA’s findings.

“This company, now trading as Youpla, has long exploited the Aboriginal community by posing as an Aboriginal owned company with a product meant for their specific needs,” said Karen Cox, CEO of the Financial Rights Legal Centre, which currently has seven other active legal cases against companies in the Youpla group.

She added: “Funeral insurance has always been a terrible product, especially if you entered into it at a young age. It has a high cancellation rate and leaves you nothing if it’s cancelled due to non-payment at any stage, regardless of how much has already been paid.

“It is particularly bad for disadvantaged and vulnerable people who are already struggling with finances. The amount paid into these products is rarely worth it. Every individual’s circumstances are unique. It’s important that anyone with concerns about a funeral insurer or service contact the Financial Rights Legal Centre or seek other independent legal advice.”

Victorian Aboriginal Legal Service CEO Nerita Waight said the AFCA’s determinations “bring into stark reality” the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

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“The findings of the Royal Commission painted a rather bleak picture regarding the treatment of many Aboriginal and Torres Strait Islander people within the financial services system,” she said. “Aboriginal and Torres Strait Islander people are often highly vulnerable to exploitation due to social and economic disadvantages and lower levels of financial literacy, due to the lack of financial services providers offering culturally safe financial service products.

“Aboriginal and Torres Strait Islander people are also particularly vulnerable to poor value funeral insurance products because of the cultural importance of Sorry Business and the high costs involved.”

Siobhan Doyle, senior legal practitioner at the Victorian Aboriginal Legal Service, added: “The Royal Commission has shown that this has resulted in many firms designing business models around the economic exploitation of Aboriginal and Torres Strait Islander people. The findings of these decisions evidence that many operators continue to mislead or behave deceptively in their engagement with Aboriginal and Torres Strait Islander peoples.

“Aboriginal and Torres Strait Islander people are being exploited by individuals selling unsuitable financial products and are being subjected to unsolicited and high-pressure selling techniques, that are resulting in hardship.”