The Australian Securities and Investments Commission (ASIC) has secured a victory in the Full Court against ACBF Funeral Plans Pty Ltd and Youpla Group Pty Ltd, in a landmark case addressing misleading claims to Indigenous consumers.
The court found that ACBF, a funeral expenses insurance provider, falsely represented itself as being Aboriginal owned or managed, which was not the truth.
This appeal, upheld by the Full Court, marks a pivotal moment in ASIC's efforts, initiated in 2020 after engaging with First Nations advocacy organisations and identifying the detrimental impact of ACBF and Youpla's practices on Aboriginal communities.
ASIC Deputy Chair Sarah Court expressed the significance of the court's decision.
“[The] decision provides some formal acknowledgment of that harm and will be a deterrent to anyone who tries to mislead Aboriginal consumers about whether a business is Aboriginal owned or managed,” she said.
The court's findings correct a previous Federal Court ruling, establishing that ACBF did not have Aboriginal ownership or management during the period from Jan. 1, 2015, to Nov. 30, 2018, debunking the company's claims. This outcome reverses the earlier decision, which had concluded that ASIC had not conclusively demonstrated the falsity of ACBF's representations.
The proceedings are now set to return to the trial judge for the determination of penalties related to these misrepresentations.
ACBF, a subsidiary of Youpla, had been actively marketing the ACF Plan, targeting primarily Aboriginal consumers with promises of covering funeral expenses through regular premium payments.
The case attracted national attention during the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry, which scrutinised Youpla's (then known as ACBF Group Holdings Pty Ltd) operations.
In its 2020 legal action, ASIC accused ACBF and Youpla of multiple misleading practices, including untrue assertions about Aboriginal ownership or management, community endorsements, comparative benefits of the plan, and the nature of benefit payments. Initially, a Sept. 5, 2023, judgment found ACBF accountable for misleading consumers regarding the payout process, imposing a $1.2 million penalty, while dismissing other charges, including those against Youpla.
With ACBF and Youpla entering liquidation in early 2022, ASIC persisted with its litigation, emphasising the broader importance of deterring similar misconduct.
Further action by ASIC includes civil penalty proceedings initiated against five former directors and officers of ACBF and Youpla for failing in their duties.
The government has also responded with the introduction of the Youpla Support Program, slated to start on July 1, 2024, providing financial assistance to former Youpla members impacted by the collapse. Additionally, the Youpla Group Funeral Benefits Program has been established to offer funeral benefits to deceased members of the Youpla fund since April 1, 2020.
ASIC advised affected consumers to explore funeral financing options through its Moneysmart website and seek guidance from financial counselling and legal aid services. For Indigenous individuals impacted by these developments, 13 YARN provides around-the-clock crisis support.
