Consumer and legal services say the Federal Government must take action to assist Aboriginal and Torres Strait Islander policyholders left without funeral plans after the collapse of Youpla.

Community organisations say they have been overwhelmed by thousands of distressed callers as a result of Youpla funds this month entering liquidation, affecting 15,000 First Nations policyholders.

Mob Strong Debt Help solicitor Mark Holden says conduct exposed at the Hayne royal commission was already known, and the Australian Financial Complaints Authority had found consumers were deceived into thinking they were buying into a product “run by and for the benefit” of Aboriginal people.

“Commissioner Kenneth Hayne noted that First Nations people, especially those living in regional and remote communities, were sold policies of little value to them through predatory sales tactics,” he said.

“It’s time for the Australian Government to end the heart-breaking consequences of this appalling mistreatment of First Nations peoples.”

Bush Money Mob, Broome MD Alan Gray says the funeral plan sales have been “the most traumatic consumer rip-off” of Indigenous people seen in the Kimberley, Pilbara or East Arnhem Land.

“The Federal Government has known about this scandal since at least 1992,” he said. “Treasurer [Josh] Frydenberg needs to establish a fund to pay for funerals and refunds.”

Groups calling for Government action include the Financial Rights Legal Centre’s Mob Strong Debt Help service, the Indigenous Consumer Assistance Network, Victorian Aboriginal Legal Service, Consumer Action Koori Help, Bush Money Mob, Choice and Financial Counselling Australia.