The Federal Court has ordered a $3.5 million penalty against ACBF Funeral Plans Pty Ltd (in liquidation) (ACBF) for misrepresenting that funeral expenses insurance provider ACBF was Aboriginal owned or managed when it was not.
The $3.5 million penalty handed down today comes in addition to the $1.2 million penalty ordered in September 2023 over another misrepresentation that consumers would receive a lump sum payment when this was not the case. This brings the total penalties ordered against ACBF to $4.7 million.
ASIC Chair Joe Longo said, ‘Today’s penalty is a strong deterrent to anyone who tries to mislead Aboriginal consumers by falsely claiming Aboriginal ownership or management.
‘It is one of ASIC’s enduring priorities to tackle misconduct targeting First Nations people and our work in this case shows exactly why.’
In handing down his decision, Justice Goodman agreed with ASIC’s submission that the making of the representation that ACBF was Aboriginal owned or managed when it was not was deliberate and callous and involved egregious conduct.
Today’s penalty decision comes after ASIC’s successful appeal to the Full Federal Court overturning part of an earlier Federal Court decision in relation to ACBF and Youpla Group Pty Ltd (Youpla) handed down on 29 February 2024. The matter was remitted to the Federal Court for a decision on the appropriate penalty which was delivered today.
ASIC is not to enforce either penalty without leave of the Court because ACBF is in liquidation.
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Background
ACBF, a wholly owned subsidiary of Youpla, offered, promoted and sold the Aboriginal Community Funeral Plan (ACF Plan), a funeral expenses insurance policy, primarily to Aboriginal consumers. ACBF customers who purchased the ACF Plan paid fortnightly premiums so that their nominees, such as their family members, would be covered for funeral related expenses up to a selected benefit amount.
Youpla Group (then ACBF Group Holdings Pty Ltd) was the subject of a case study in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In October 2020, ASIC commenced proceedings in this matter (20-262MR) alleging four misrepresentations by ACBF and involvement in those misrepresentations by Youpla, that:
- ACBF was owned or managed by an Aboriginal person or persons
- the ACF Plan had Aboriginal community approval
- the ACF Plan was more beneficial to Aboriginal consumers than other funeral insurance products generally available at the time, and
- plan holders would receive a lump sum payment of their chosen benefit amount, when in fact they would only be reimbursed for funeral related expenses up to the benefit amount upon production of proof that those expenses had been incurred.
On 11 March and 27 April 2022 respectively, ACBF and Youpla went into liquidation. ASIC sought leave to continue the proceedings due to the importance of general deterrence in relation to the defendants’ conduct.
On 6 September 2023, the Federal Court found that ACBF misrepresented to plan holders that they would receive a lump sum payment of their chosen benefit amount, when in fact they would only be reimbursed for funeral related expenses up to the benefit amount upon production of proof that those expenses had been incurred (23-244MR). The court ordered a $1.2 million penalty against ACBF (which ASIC is not to enforce without leave of the Court). However, the Federal Court found that ASIC had not made out its case in relation to the other alleged misrepresentations.
On 29 February 2024, the Full Federal Court upheld ASIC’s appeal, finding that ACBF had also misrepresented to Aboriginal consumers that it was Aboriginal owned or managed when that was not the case (24-033MR). The matter was then remitted to the trial judge of the Federal Court to determine the appropriate penalty.
Separately, on 30 August 2023, ASIC commenced civil penalty proceedings in the Federal Court against five former directors and officers of ACBF Funeral Plans and Youpla Group for breaches of their duties (23-237MR). This matter is ongoing.
Other ACBF and Youpla information
The Government’s Youpla Support Program commenced on 1 July 2024. Under this program, people who paid for Youpla policies any time on or after 1 August 2015 can apply for a payment.
The program is being run by Services Australia (Centrelink) and overseen by the National Indigenous Australians Agency (NIAA).
For more information about the Youpla Support Program, go to Services Australia’s website or call the Centrelink Indigenous call centre on 1800 136 380 – selecting option 7.
If you believe you are eligible for the Youpla Support Program, but have not been contacted by Services Australia, you should contact Services Australia through their Centrelink Indigenous call centre on 1800 136 380.
The Federal Government has previously announced and administered the Youpla Group Funeral Benefits Program. The Program paid a funeral benefit for a person who has passed away that was a Youpla fund member on or after 1 April 2020. The Program ran until 30 June 2024.
ASIC’s Moneysmart website has information about the different options to pay for your family members’ funerals and for planning your funeral arrangements. Consumers who have been affected by this matter can also contact financial counselling and legal services organisations such as Mob Strong Debt Help to understand their options.
ASIC acknowledges that the conduct of ACBF/Youpla may have caused significant distress for affected consumers. 13 YARN (13 92 76) is a First Nations crisis support line available 24 hours a day, 7 days per week.