The Australian Financial Complaints Authority (AFCA) has ruled against Aboriginal Community Benefit Fund (ACBF) in two separate disputes lodged against the funeral insurer.

In the two complaints, ACBF was accused of engaging in misleading and deceptive conduct to sell its funeral policies to vulnerable consumers, particularly those from the Indigenous community.

The first case involved a complainant who took up a plan in June 2007, who thought the policy was for the benefit of the Aboriginal community seeing that the marketing materials contained images and symbols closely tied with Indigenous culture.

He had limited education and trusted the ACBF representative who sold him the product since he was not familiar with financial products. He says he thought the representative was working for a funeral business at that time when they talked about the policy.

According to the AFCA ruling, the complainant says he was not told the plan was an expenses-only policy, that premiums would increase over time and that given his age, he would pay more premiums than his benefit amount.

The complainant says had he known this, he never would have signed up for the plan.

“ACBF’s language misled and deceived the complainant,” AFCA says in its ruling.

“The complainant’s main source of income is social welfare and he has limited formal education and financial literacy.

“Combined with his cultural responsibilities to ensure he has enough money to pay for his funeral, this made him a vulnerable person.”

AFCA ruled the funeral insurer must refund the complainant the premiums of $2727 paid until he stopped payments in July 2019. It must also pay interest on the refund.

In the second dispute, AFCA ordered the full amount of premiums the 57-year-old Aboriginal woman had paid for a plan she took up in 2009 that was subsequently cancelled in 2019 due to non-payment of premiums.

The woman depended on Centrelink benefits and left school when she was 15, putting her in the category of vulnerable consumers.

She says that she was not told that ACBF was not Aboriginal owned or operated. She says that the use of Aboriginal motifs and designs on the cover page of the application form, including the rainbow serpent, reinforced the belief that it was.

The woman also says she was not informed at any time that premiums would likely exceed the benefit amount and that family members may not receive the full benefit amount because the plan covers funeral expenses only.

“The available information indicates that, most likely, the attendance by the ACBF agents in 2006 were not solicited by the complainant and her partner,” AFCA said.

“While the complainant did not apply until 2009, it is likely that she relied on the misrepresentations made by the ACBF agents during the face-to-face meeting in 2006.”

Click here for the first dispute ruling and here for the second.