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ASIC launches action against funeral insurer that targeted Indigenous customers

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The Australian Securities and Investments Commission (ASIC) says it has taken legal action against Youpla Group and its subsidiary ACBF Funeral Plans, accusing them of using false and misleading tactics to sell funeral covers to the Indigenous community.

ASIC, in its statement of claim filed in the Federal Court, also alleged the funeral insurer made misrepresentations in its marketing materials to create the perception that ACBF Funeral Fund was owned or managed Aboriginal person or persons.

The alleged misconduct took place between January 2015 and November 2018.

The corporate regulator says the funeral insurer, which last year rebranded as Youpla, promoted and sold the Aboriginal Community Funeral Plan, a funeral expenses insurance policy, primarily to Aboriginal consumers.

The plan was marketed as providing more benefits to Indigenous consumers than other rival products and would-be buyers were told the cover had the approval of the Aboriginal community, ASIC said in a statement.

Policyholders were misled when they were told they would receive a lump sum payment of their chosen benefit amount. In reality, they would only be reimbursed for funeral related expenses up to the benefit amount upon production of proof that those expenses had been incurred.

“The payout representation was false,” ASIC said in its statement of claim.

In the statement of claim, ASIC says the insurer had representatives travelling to regional towns with a high proportion of Aboriginal residents where they attended community meetings to explain the role of ACBF.

They also visited the homes of Aboriginal residents who had expressed an interest in the product.

“In carrying out their role, field representatives wore clothing, used identification and business cards, and drove (or frequently drove) cars, that bore one or more of the Aboriginal Style Logos,” the statement of claim said.

ASIC says it is seeking declarations, injunctions to prevent further contraventions, civil penalties and adverse publicity orders.

Youpla was criticised during parliamentary hearings in April by MPs and also during the Hayne royal commission hearings in 2018 for selling low-value funeral products to the Indigenous community under its previous name.

This month the Australian Financial Complaints Authority released a dispute ruling in which it determined the insurer had misled an Indigenous woman into buying a policy in 2006 when she was 20.

Click here for the statement of claim filed in the Federal Court.