In 2013, the government was warned that allowing funeral insurers to access Centrelink payments could end badly for customers. Almost a decade later, it did.
Euahlayi woman Beverley Roberts is one of thousands of First Nations Australians who for years put money aside to pay for their own funerals.For years, its business model thrived by taking money out of customers' Centrelink payments
But rather than transferring the money from her savings account to pay her premiums, the ACBF salesperson gave her the option to take the amount directly from her Centrelink payments. Aaron Davis from the Indigenous Consumer Assistance Network said ACBF's access to Services Australia’s Centrepay system allowed the company to take off in remote communities.
Ms Roberts says she paid thousands of dollars to ACBF before she discovered it was not owned or operated by Aboriginal people. When ACBF joined in 2001, it had recently faced court action from regulator ASIC for misleading and deceptive conduct.ICAN's Mr Davis first raised concerns about the company using Centrepay in 2007.I just don't think that those checks and balances were in place for having the right type of businesses on that system," he said.
"Anecdotally, Indigenous customers are the main users of this deduction category, in large part due to their cultural practices focusing on a profound reverence and respect in matters relating to death and mourning," she wrote. "I would have thought at the time, it would have been a sensible thing because it would force the policyholders to meet their monthly payments, when if they had to make voluntary payments every month, it would have been the last thing on their list to pay," he said."To my knowledge, they could have cancelled the Centrepay direction at any time if they so desired but it would mean they would lose their policy, so they would have to make a decision on that.
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