When ASIC cracked down on the insurance company, it got millions in Social Security benefits

Euahlayi wife Beverley Roberts is one of thousands of First Nations Australians who put money aside for years to pay for their own funerals.

“I lost my father, brother, sister and cousin all within a 12-month period, and we struggled to bury them,” said Ms. Roberts.

“That’s why I was so happy when they came by and said they were an Aboriginal funeral fund.”

Ms. Roberts said she was the first person in Dubbo to sign up with the funeral service provider the Aboriginal Community Benefit Fund (ACBF) in the mid-1990s.

For years, Beverley Roberts authorized ACBF to deduct money from its Centrelink payments. Provided: Judith Scolari-Gibson

But instead of transferring the money from her savings account to pay her premiums, the ACBF seller gave her the option to take the amount directly from her Centrelink payments.

“When they were going around all our homes and just signing us in, they had the Centrelink forms that allowed them to take direct debit off our Centrelink payment,” said Ms Roberts.

She estimates she paid more than $60,000 for policies for herself and her family.

I just thought it was just a great thing for the Aborigines because we struggle all the time to bury our loved ones.”

From 2001 to 2017, ACBF was the only funeral fund to use the government-operated system Centrepay to write off millions of dollars from Centrelink payments.

Now ACBF – aka Youpla – has collapsed, leaving thousands of clients like Ms Roberts without funeral insurance.

Aaron Davis of the Indigenous Consumer Assistance Network (ICAN) said ACBF’s access to Services Australia’s Centrepay system enabled the company to get started in remote communities.

“The fact that ACBF was in the Centrepay system for so long meant that the company was able to grow and grow and grow and prosper to the point where we estimate that Indigenous people have lost more than $200 million.”

The Australian Securities and Investments Commission is set to tell federal court today whether it intends to pursue a misleading and deceptive conduct case it brought against the company in 2020 for its conduct between 2015 and 2018.

Aaron Davis stands with his arms folded and looks at the camera.
Aaron Davis has been advocating for ACBF clients for decades.ABC News: Brendan Mounter

Questions are also now being raised about how the company has been able to use the Centrepay system for years, even after two reports warned of a potential lack of consumer protections.

Proponents say it is time the government took responsibility for its part in the disaster.

ACBF is allowed to ‘prosper’ on Centrepay

Ms. Roberts says she paid thousands of dollars to ACBF before discovering it was not owned or controlled by Aboriginal people.

“I was the first to sign up here in Dubbo, and after that, [the salesman] asked me where all the other Aboriginal people in this area lived, and I pointed him all in the right direction, and he signed everyone up,” she said.

In 2008, ACBF paid out at her husband’s funeral when he died.

Ms. Roberts later enrolled her grandchildren, paying $87 every two weeks for eight ACBF policies.

She initially did not believe that the Youpla Group was in financial trouble.

“And then suddenly I kept looking [other people] on Facebook saying ‘stop payments immediately, stop payments immediately.'”

Government has issued warnings

Over the years, there has been no shortage of warnings that the company may not have been a suitable candidate for Centrepay.

Centrepay was founded in the 1990s as a financial management tool, allowing benefit recipients to deduct essential expenses such as rent and utility bills from Centrelink payments before the money was in their bank accounts.

When ACBF joined in 2001, it recently faced legal action from the regulatory agency ASIC for misleading and deceptive conduct.

In 2003, it faced another ASIC challenge, for violating federal anti-hawking laws.

ICAN’s Mr. Davis first expressed concerns about the company’s use of Centrepay in 2007.

In 2013, an independent investigation into Centrepay warned the government of the risk of a funeral insurance company giving access to the scheme.

“It is possible that the providers go into receivership or go bankrupt, with customers then not getting a benefit for the money spent over many years,” wrote report author Anna Buduls in 2013.

In fiscal 2011/12 alone, she reported that 9,500 customers had made payments for $6.6 million for funeral insurance through Centrelink.

A black and white newsletter informing customers that there is 'good news from Centrepay'.
A 2002 ACBF newsletter letting customers know they can now use family tax breaks to pay for coverage. Delivered

“Anecdotally, Indigenous clients are the main users of this category of deduction, largely because of their cultural practices that aim at a deep reverence and respect in matters relating to death and grief,” she wrote.

Ms. Buduls wrote that stakeholders and regulators alike were concerned that funeral fund customers did not fully understand what they were buying and would lose their contributions if they missed a single payment.

The report also noted the department’s lack of willingness to investigate when companies using Centrepay were accused of doing the wrong thing.

Six thousand missing customers

Current Youpla director Greg Wheeldon said he saw no reason why the company should not have access to Centrepay.

Greg Wheeldon is sitting in his backyard.
Greg Wheeldon says he sees no reason why ACBF – now known as Youpla – should not have been allowed access to Centrepay.ABC News: Amy Bainbridge

“I would have thought at the time that it would have been sensible because it would force policyholders to meet their monthly payments, whereas if they had to make voluntary payments every month it would have been the last on their list to pay,” he said. .

“As far as I know they could have canceled the Centrepay direction at any time if they wanted to, but it would mean they would lose their policy so they would have to make a decision on that.”

A message in an ACBF newsletter warning the customer that ACBF's access to Centrepay would end in 2017.
In a newsletter sent in 2016, ACBF warned customers that they could no longer contribute through Centrepay.Delivered

The government changed the rules so that the funeral provider could no longer access Centrepay in 2015, but due to legal proceedings, the system continued to use the system until February 2017.

Ms. Roberts then switched her policy to direct bank transfer.

But 6,000 other policyholders could not be reached by the company and subsequently lost their coverage and all the money they contributed.

Proponents want efforts to be made to track down those people and include them in a government-established compensation fund.

Appearing before the royal commission on banking in 2018, then-CEO Bryn Jones was grilled about how the company managed to lose track of so many customers.

Rowena Orr, QC: Couldn’t find them?

Brian Jones: No.

Mrs. Orr: Even though you had deducted amounts from their Centrelink benefits?

Mr Jones: Yes.

The ABC contacted Services Australia to ask a series of detailed questions, including how much money had been paid to ACBF through the Centrepay system.

Services Australia said it did not have the resources to extract the data.

According to the company, appropriate measures have been taken against the company.

“On July 1, 2015, the Centrepay policy was changed and funeral insurance was subsequently excluded from Centrepay,” the message reads.

“In accordance with this change in Centrepay policy, the Aboriginal Community Benefit Fund was revoked as a Centrepay company.”

The new federal government has committed itself to an investigation into ACBF/Youpla, but has not yet given a timetable.

Posted updated

#ASIC #cracked #insurance #company #millions #Social #Security #benefits

Leave a Comment

Your email address will not be published. Required fields are marked *