Former Youpla directors fined and banned after funeral fund collapse

Three former directors of Youpla Group have received corporate management bans ranging from five to 10 years and financial penalties totalling $90,000 after the federal court found they breached their duties. The funeral insurance business, formerly called the Aboriginal Community Benefit Fund, collapsed in March 2022, leaving more than 13,000 Aboriginal people without funds to cover funerals.

Justice Geoffrey Kennett ordered Jonathan Law on Wednesday, 11 November, to pay the commonwealth $50,000 and barred him from managing corporations for six years. Michael Wilson received a 10-year ban and a $20,000 penalty. Geoffrey Clayton was disqualified for five years and ordered to pay $20,000. Together, the three must also contribute $17,000 towards the plaintiff’s costs.

Kennett found that the directors had not exercised the required “care and diligence”, had failed to manage conflicts of interest and had caused detriment to ACBF members. The orders followed a judgment late last month imposing a $250,000 payment and a 15-year management ban on company founder Ron Pattenden. He acknowledged breaches of directors’ duties in settling a claim with the Australian Securities and Investments Commission, ASIC.

In that earlier judgment, Kennett also found that former Youpla Group chief Bryn Jones had breached his duties as a director, following a contested liability hearing in February. Jones denied knowing about increases in the fund’s insurance premiums. His penalty will be decided at a later hearing.

ASIC began federal court proceedings against the five former directors and officers in August 2023, alleging misconduct and governance failures affecting First Nations fund members. The regulator alleged they maintained insurance arrangements with Crown Insurance, a company based in Vanuatu that Pattenden and Law owned and controlled, and failed to act in the best interests of ACBF entities and members. Each breach committed between 2017 and March 2019 can carry a maximum penalty of $200,000.

For decades, Youpla sold junk funeral policies to Indigenous people throughout Australia. Its sales efforts included communities where English was not the first language and literacy levels were low. Promotional materials used the Aboriginal flag’s red, black and yellow colours, including children’s colouring books and stuffed toys. The business also attended community events and sold policies door to door.

Regulators examined the company over the years, but its licence to sell new products was withdrawn only after the banking royal commission exposed its conduct in 2018. ASIC raised questions about its solvency in 2021, before the directors eventually closed the business. Those affected by the collapse included elderly people and people receiving palliative care. Some families turned to crowdfunding, while others left relatives’ bodies in morgues as they sought money for funerals.

In September 2023, the federal court fined Youpla $1.2 million for misrepresenting its funeral policies. The court found that customers had been told they would receive a lump sum, although the policies only reimbursed expenses they could demonstrate had been incurred. Because Youpla was in liquidation, it avoided paying millions more in fines imposed in July 2025.

The federal government announced a $97 million support package in February 2024 to assist thousands of predominantly low-income Aboriginal families with their financial losses. Payments for remaining victims will continue to be processed until 1 December 2026. Eligible recipients can choose either a funeral bond or a cash payment valued at 60% of their policy.