The Federal Court has imposed a $3.5 million penalty against ACBF Funeral Plans for misrepresenting that it was Aboriginal-owned or managed.

This adds to a $1.2 million penalty in September 2023 over the misrepresentation that consumers would receive a lump sum payment, when this was not the case.

The Australian Securities and Investments Commission, which brought the action, may not enforce either penalty without leave of the court because ACBF is in liquidation.

The case relates to funeral insurance sold between 2015 and 2018 and has received considerable attention, with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry compiling a case study on ACBF and its parent company Youpla Group.

The latest penalty comes after ASIC appealed against the court’s decision in 2023 that although ACBF misrepresented its ownership, this did not contravene the ASIC Act.  

ASIC chair Joe Longo says the penalty “is a strong deterrent to anyone who tries to mislead Aboriginal consumers by falsely claiming Aboriginal ownership or management”.

Justice Scott Goodman agreed with ASIC’s submission that the misrepresentation “was deliberate and callous and involved egregious conduct”.

Several witnesses said they insured with ACBF because they believed it was Aboriginal-owned or managed, and Justice Goodman said it is reasonable to infer a significant number of 5106 plan-holders signed up on that representation.  

The Federal Government has set up the Youpla Support Program, which enables people who paid for policies after August 2015 to apply for a payment.

ASIC is also taking civil penalty proceedings in the Federal Court against five former directors and officers of ACBF Funeral Plans and Youpla Group for breaches of duty.

See the penalty ruling here.