A court has ruled that funeral insurer Youpla Group and subsidiary ACBF Funeral Plans misrepresented to Indigenous consumers that the business was owned or managed by Aboriginal people.

The Full Federal Court ruling upholds an appeal by the Australian Securities and Investments Commission and overturns a decision last September by primary judge Justice Scott Goodman.

It says Justice Goodman erred in dismissing the allegation made by the commission in its case against the funeral insurer. The ownership issue was one of four claims of misconduct the regulator flagged from between January 2015 and November 2018.

Evidence presented to the primary judge was sufficient to establish the falsity of the ownership claim, the Full Federal Court said in a ruling last week.

The ruling notes the insurer admitted in its amended defence that the business was not owned or managed by Aboriginal people. The primary judge also failed to consider the relevance of the introduction in September 2018 of a disclaimer from the insurer that included the phrase “we are not an Aboriginal company”.

“As we trust is abundantly clear … the evidence clearly establishes that the Aboriginal ownership/management representation is false,” the court said.

The court has ordered that the case return to the primary judge for determination of a penalty.

Youpla was under scrutiny for years over high-pressure sales tactics and misleading and deceptive practices used to market low-quality funeral plans to Indigenous communities. Its business model was exposed during the 2018 Hayne royal commission and it later collapsed as its financial troubles deepened.

Click here for the ruling.