A coalition of consumer groups has written to the Australian Securities and Investments Commission (ASIC) urging it to hold Youpla directors and other office holders accountable for financial harm caused to First Nations people who purchased worthless funeral plans.

Many policyholders feel the law has failed them and prioritising enforcement action will send a strong message to the marketplace and the broader community that the exploitation of First Nations consumers will not be tolerated, the letter says.

“Such action will, in our view, deter other companies from exploiting First Nations consumers in this way and will effectively promote the public interest in compliance with the law.”

ASIC started Federal Court proceedings against ACBF Funeral Plans and Youpla Group in October 2020 following a referral from the Hayne royal commission.

The letter says it’s understood litigation has been stayed as the defendants are in liquidation, but urges ASIC to also push ahead on the matters, while not seeking a costs order against the remaining funds, given the importance of the action.

“It has been held in various precedents that there is significant public interest value in regulators continuing proceedings against traders even in insolvency,” it says.

“Insolvency does not necessarily defeat the importance of pursuing declarations of contravening conduct and penalties being on record in aid of deterrence.”

The letter is from Consumer Action Law Centre, Financial Rights Legal Centre (FRLC) - Mob Strong Debt Help, Choice, Indigenous Consumer Assistance Network, Financial Counselling Australia, Victorian Aboriginal Legal Service, Bush Money Mob and Broome Circle.

The groups are also seeking Federal Government action to assist policyholders who have been left without cover and who have been unable to receive a refund of premiums.

Newly appointed Indigenous Australians Minister Linda Burney has said an investigation into Youpla will be one of her highest priorities.

“This is positive but we are concerned that an inquiry will only delay redress for affected people, some of whom have unpaid claims right now because their loved ones have passed away since the liquidation or in the months leading up to it,” FRLC CEO Karen Cox told insuranceNEWS.com.au.

“We are also concerned to see all members getting access to redress, including those who may have dropped out after paying for many years because they realised they had been misled, for example in the wake of the royal commission exposure, or those who lost their cover for non-payment.”