ACBF sold Aboriginal families funeral plans for 30 years, then collapsed owing $66M

The Aboriginal Community Benefit Fund, later known as Youpla, was set up in the 1990s by British-born businessman Ron Pattenden with two Aboriginal health workers, selling funeral payment plans door to door in Indigenous communities, where Sorry Business makes funerals one of the most important — and expensive — cultural obligations. Families in their thousands opened their homes and wallets to the salespeople.

Concerns were raised almost immediately. A regulator stepped in early and the company briefly ceased trading — but instead of dying, it restarted and expanded. Over the years it sold policies to people with low financial literacy, encouraged parents to insure babies and primary-school children, marketed itself as Aboriginal-owned and run when it was not, and failed to fund the community projects it had promised.

Between 2001 and 2017 the company was allowed to deduct millions of dollars directly from customers' Centrelink payments, despite a warning that consumers were vulnerable if the company collapsed. ASIC ran three court cases against it; like a hydra, ACBF always grew another head, eventually morphing into four companies. Millions of dollars were sent offshore to an underwriting company associated with Pattenden — entirely legally, per an earlier court ruling.

Real action came only when ACBF's conduct was exposed at the banking royal commission and its licence to sell new products was withdrawn. Regulators and government were warned then that the fund was at risk of collapse with 14,500 Indigenous people's money — yet nothing was done to safeguard it. When the fund collapsed in March 2022, a liquidator's report put customer losses at least $66 million; advocates believe more than 30,000 people were affected over the years.

14,500 customers at least $66M out of pocket per the liquidator's report; advocates estimate more than 30,000 people lost money over three decades

The business model depended on trust it had fabricated — an Aboriginal-sounding identity and community promises that were not true.

It kept selling to financially vulnerable customers even after repeated regulatory action, because every shutdown was followed by a restart.

Centrelink deduction rights made collection automatic and insulated the fund from ever having to earn the next payment.

Regulators each held a piece — ASIC, NSW Fair Trading, AFCA — and the buck stopped with no one until the royal commission.

Selling to vulnerable customers on borrowed trust — a name, a community, a promise — is a model that works until regulation catches up, and then everyone loses.

As of the ABC's August 4, 2022 report: liquidators were still working to establish why the company collapsed; advocates were pressing for compensation and asking why regulators failed to intervene for decades. Pattenden, found in New Zealand with his 32.9-metre yacht and waterfront apartment, said he was not to blame for the demise of the company.