How did collapsed Youpla evade regulators for 30 years?

With many policyholders in limbo following funeral insurer Youpla Group’s (Youpla or Group) collapse early this year, Samantha Rudolph, Aboriginal policy officer at Consumer Action Law Centre, delved into how the insurer evaded regulators for 30 years despite a mountain of complaints.

Youpla, previously known as the Aboriginal Community Benefit Fund (ACBF), had been selling funeral insurance exclusively to Aboriginal people for decades. However, it went into liquidation in March 2022, a year after the Australian Securities and Investments Commission (ASIC) began investigating the Group when the Banking Royal Commission accused it of falsely marketing itself as an Indigenous-owned business.

In The Guardian’s report, Rudolph claimed that the first complaint against ACBF might have been filed in 1992. Since then, consumer groups, caseworkers, and advocates have been telling the Australian government of the issue. Over the years, New South Wales Fair Trading and ASIC raised issues with the fund. However, successive governments failed to imply laws that would have subjected the product the fund sold to the same prudential regulations covering other types of insurance.

The Australian Financial Complaints Authority (AFCA) also reported that it has received over 700 complaints against Youpla since 2018 and issued 178 decisions against the group for “misleading and deceptive conduct.”

Read more: Federal government called to help Aboriginal families affected by Youpla collapse

With thousands of Youpla customers in limbo, over 120 legal, health, and social services organisations have teamed up to launch the Save Sorry Business campaign to help the affected customers.

“People have paid for funeral cover to ensure their families can carry out Sorry Business and grieve together — not to be left with the challenges of intergenerational debt and hardship,” the coalition said in a previous statement, as reported by The Guardian.

In a recent statement reported by The Guardian, Rudolph said: “Some people that we’ve spoken with blame ASIC … but I think the consensus of the Save Sorry Business campaign is that the buck stops with the government. They are the ones who give the power to ASIC and other regulators. They’re the ones who write legislation. They’re the ones who can also help us get proper redress.”