The Federal Court has ordered a $1.2 million penalty against ACBF Funeral Plans Pty Ltd (in liquidation) (ACBF) for misrepresenting the sale and promotion of funeral expense insurance to Aboriginal people.

The Court found that ACBF represented to ACF 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.

ASIC Deputy Chair Sarah Court said, ‘ASIC took the case to Court in October 2020 because of the harm we believed this business was causing to Aboriginal people.

‘Taking regulatory action where misconduct is targeted at Aboriginal and Torres Strait Islander peoples is a priority that we are committed to, and we will continue to work with stakeholders to achieve appropriate outcomes.’

The court did not accept ASIC’s case that ACBF had falsely represented that:

• it was owned or managed by an Aboriginal person or persons,
• the ACF Plan had Aboriginal community approval, or that
• the ACF Plan was more beneficial to Aboriginal consumers than other funeral insurance products generally available at the time.

The court also did not accept that parent company Youpla Group was involved in the contravention by ACBF.

ASIC is carefully reviewing the judgment.

Background

ACBF Funeral Plans, a wholly owned subsidiary of Youpla Group, offered, promoted and sold the ACF Plan, a funeral expenses insurance policy, primarily to Aboriginal consumers. Plan holders of the ACF Plan paid fortnightly premiums for their nominees, such as their family members, to be covered for funeral related expenses up to the selected benefit amount. Plan holders made these regular premium payments to keep the cover on foot.

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.

ASIC commenced proceedings in this matter in October 2020 (20-262MR).

On 11 March and 27 April 2022 respectively, ACBF Funeral Plans and Youpla Group went into liquidation. ASIC sought leave to continue the proceedings due to the importance of general deterrence in relation to the defendants’ conduct.

ASIC and NSW Fair Trading made a joint application to the Supreme Court for orders appointing special purpose liquidators to investigate whether money can be recovered for creditors of the Youpla Group companies. On 8 December 2022, the Court made orders appointing Mr Derrick Vickers and Ms Melissa Humann of PwC as special purpose liquidators of the Youpla Group entities. Mr David Stimpson of SV Partners remains the general-purpose liquidator of Youpla Group (22-372MR).

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).

The Federal Government has previously announced the Youpla Group Funeral Benefits Program. The Program will pay a funeral benefit for a person who has passed away that was a Youpla Group fund member on or after 1 April 2020. If the member’s funeral was already paid, an application can still be made. The Program will run 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 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.

Editor’s note:

On 3 October 2023, ASIC filed a Notice of Appeal in relation to the orders and judgment of his Honour Justice Goodman (23-267MR).

Editor's note 2:

This media release was amended on 27 October 2023 following an extension of the program end date from 30 November 2023 to 30 June 2024.