A controversial funeral insurer has been asked to address concerns around its finances after administration problems saw thousands of clients left in the lurch when it went into liquidation last week.
Financial regulator Australian Securities and Investments Commission (ASIC) said it had asked Youpla Group, formerly known as the Aboriginal Community Benefit Fund (ACBF), to provide information about its financial viability after a branch of the business filed a liquidation notice on Thursday last week.
Youpla manages four entities that provide funeral insurance products nationwide and ASIC said it had concerns about the other three funds.
By Friday, the remaining branches of the business had also entered into external administration.
In a statement posted to its website, administrator David Stimpson from SV Partners confirmed the businesses were being investigated.
"The liquidator will endeavour to contact all members as soon as possible with details of how the liquidator intends to deal with the funds and members’ claims," it reads.
"The liquidator will conduct an investigation into the affairs of the Youpla Group/ACBF Group and will be reporting to creditors on the outcome of those investigations."
'Distress' caused
The statement went on to say initial reports to creditors and members would be issued by March 25, and a meeting with all those concerned would take place as soon as possible.
The move has left thousands of customers who had paid thousands of dollars in premiums over the past 30 years in the lurch, many of whom had signed up when they believed the business was Indigenous-owned.
After customers expressed their concerns about the future of their funeral funds following the notice, ASIC said it had sought information from the company about its finances.
"ASIC appreciates the ongoing uncertainty about the future of the Youpla Group is causing distress for the Aboriginal and Torres Strait Islander peoples and communities affected," the statement said.
In a letter addressed to directors Gregory Wheeldon and John Allen, ASIC said it was concerned customers had no further clarity about the future of their funeral funds.
"This information is critical to consumers who are currently considering what steps they should be taking, especially in relation to continuing to make financial contributions."
South Australian Nurrung woman Elaine, whose last name has been withheld to protect her privacy, said she was concerned her 78-year-old mother had been paying premiums up until mid-February with no notice about the fund’s status.
She said when she received notice ACBF 2 had gone under, it was concerning that other arms of the company continued to operate.
Former ACBF employee and customer Natalie Hunter said she was also concerned the insurer was continuing to operate.
"I think [they] need to stop immediately because they've got no cover," she said.
Liquidator Robson Cotter told the ABC there were limited funds available at this point in time for any creditors, and there would be no immediate return or dividend for those out of pocket.
The ABC understands wind-up notices were filed for the business's remaining products on Friday, in response to ASIC's request for information.
Youpla's controversial past
Youpla first came under the microscope during the Banking Royal Commission, where it was revealed it had falsely marketed itself as Indigenous-owned.
What followed was a series of complaints from Aboriginal and Torres Strait Islander customers from around the country, alleging they had been misled into believing they were supporting an Indigenous business.
It was also alleged during the commission by counsel assisting that the business was designed in such a way that policyholders might pay more in premiums than they were ever entitled to receive, due to believing it was a savings plan rather than an insurance policy.
Youpla Group has been contacted for comment.
