Funds targeted kids for funeral insurance

Tania Porter’s son Anthony was just two when he was signed up for funeral insurance. Twenty years and $22K later, she’s furious.

Tania Porter with her three-year-old granddaughter Ema outside their home in Moree, in northern NSW. Picture: Paul Mathews

Tania Porter’s youngest son, Anthony, was just two years old when he was signed up for funeral insurance by a company called Aboriginal Community Benefit Fund.

Working as a miner and living in Moree, in northern NSW, Ms Porter bought funeral policies covering herself, her partner and her seven children, where her money was funnelled into a fund controlled by ACBF.

It all started in 1998, when a “real big fella” knocked on her front door and signed up Ms Porter and her cousin-in-law to the group’s funeral fund. “They told me if one of my family members died, like my brother or sister, it could help. I should have realised then, but I thought I was doing the right thing for my family — that I could wake up every morning and be at peace,” Ms Porter said.

Twenty years on, and $22,000 later, Ms Porter missed two payments and ACBF told her it would be ending her cover with no refund. She lost everything.

Ms Porter hopes her story, which is similar to tens of thousands of others across remote and regional Australia, will help add to the weight of evidence soon to be thrown at ACBF during banking royal commission hearings in Darwin next week.

“When I started it was coming out of my credit union account, and then they started taking it out of my Centrepay,” Ms Porter told The Weekend Australian. “It needs to stop. They can’t keep doing this to people.”

Ms Porter is one of the more than 30,000 clients sold largely useless policies by ACBF. The company is run by a Gold Coast family with no ties to Aboriginal communities.

The sorry business of predatory funeral insurers pushing policies on indigenous Australians will be picked through by the royal commission as it investigates cases of company dealings with Aboriginal and Torres Strait Islander people. Funeral insurers are thought to draw in more than $300 million a year in premiums.

Executives from ANZ will also be put on the stand, and will face questioning over their provision of ATM cards to people living in remote communities and the charging of excessive overdraft and banking fees.

Another funeral insurer, Let’s Insure, which trades under the licence name of Select AFSL, is also scheduled to face questioning.

ACBF has been a thorn in the side of regulators for years. It has signed up thousands of Aboriginal children and babies to insurance schemes which could cost upwards of $100,000 over a lifetime for a funeral. “It’s an unsuitable product,” said Gerard Brody, chief executive of the Consumer Action Law Centre.

When people can no longer continue to pay ever-increasing premiums, they lose everything. When they do claim, they get paid out far less than they’ve contributed over the years.

According to the corporate regulator, about 80 per cent of customers end up cancelling their insurance. ACBF, where about a third of policyholders are aged under 20, extracted money from indigenous customers’ Centrepay benefits before money made its way to their bank accounts, a practice that ceased after a court order.

While funeral insurance is still a pervasive issue in communities, Aaron Davis, chief executive of the Indigenous Consumer Assistance Network, says predatory payday lenders and consumer leasing companies are a far bigger issue. “The royal commission has really missed the mark on what is affecting indigenous people and bringing that to light,” Mr Davis told The Weekend Australian.

The problem, however, is that the terms of reference for the royal commission excluded payday lenders.

“We were hoping it could have got broadened. The banks have pulled out of regional communities but even worse providers have replaced them,” Mr Davis said.