Funeral insurance sales to Indigenous people
In East Arnhem Land, in the Northern Territory’s remote Top End, Indigenous funeral practices – known as sorry business – can stretch on for weeks. They are among the most solemn, colourful occasions in any community. This also means they can quickly become prohibitively expensive, particularly in a region where the median weekly income is $242. Enter the funeral insurance industry, whose aggressive sales tactics directed at remote Indigenous communities were under the microscope as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry sat this week in Darwin.
Amid stories of dodgy car loans, jacked-up ATM fees and superannuation hurdles, it was the issue of how a number of insurance companies leveraged the importance of death rituals in Aboriginal and Torres Strait Islander communities that returned again and again to the fore.
Financial Counselling Australia’s Lynda Edwards told the commission there was a direct correlation between the cultural significance of sorry business for a community and the uptake of funeral insurance. “[Aboriginal people] certainly don’t want to leave that cost for family,” Edwards said. “And we know that the majority of people that have these funeral products also have those contracts to cover their children and their grandchildren in some cases.”
Balupalu Yunupingu is a senior Gumatj clan elder who lives in East Arnhem Land. He says he’s been subjected to endless calls from marketeers.
“They think I’m just a blackfella living in a remote area and I don’t know anything about funeral funds,” he says. “They call and say, ‘Do you know about this stuff?’ And I tell them, ‘No I don’t. I’m not interested in that.’ That’s how I respond … I’ve been saying, ‘No, no, no.’ ”
But Yunupingu says he has seen many of his countrymen “get tricked” into purchasing overpriced or misleading funeral plans. “Because they tell them, ‘You got money in the bank, we can save you,’ ” he says.
Guypungra “Janet” Munyarryun, a former dancer for the Bangarra Dance Theatre, says for many in Yolngu communities, the focus when someone passes away is the ceremony itself, not worrying about the money. “We don’t talk about it. We don’t communicate about who pays for it,” she says. “I don’t know about money matters about when funerals happen, who pays for it.”
Speaking at the royal commission this week, another Bangarra alumnus, retired dancer Kathy Marika, recounted her experience of being signed up for life insurance by a company called Let’s Insure.
The 60-year-old had answered a call from a private number, only to find herself bombarded with a string of personal questions: Who was her life insurer? What were the birthdates of her and her children? Marika, a Yolngu woman from East Arnhem Land now living in New South Wales, obliged with the details.
Speaking in English, her second language after Yolngu Matha, Marika said she wasn’t ready for the rapid-fire pitch from the Let’s Insure call centre employee.
“He seemed to be really pushing,” she told the commission. “It was difficult, really, the way he was talking, with a bit of a laugh in between our conversation. It didn’t make sense. Half of it I understood, and half I didn’t.”
After more than 30 minutes of this back and forth, Marika hung up on the salesman. What she was unaware of was that she’d just been snagged in a web – one that would see her signed up to a funeral insurance policy she never wanted, fielding near-daily phone calls from Let’s Insure, coerced into giving out the personal details of her family and friends and forced to seek help from Legal Aid to try to finally untangle herself from the contract.
“To me, it sounded like I had no choice to make, except that thing he was offering me,” Marika told the commission, speaking between extended recordings of her conversations with the Let’s Insure salesman.
About this time in 2015, Let’s Insure, run by Sydney firm Select AFSL, was experiencing a spike in funeral insurance sales. Speaking to the royal commission, Select AFSL managing director Russell Howden maintained Let’s Insure never specifically targeted Aboriginal customers, but he did acknowledge the number of Aboriginal policyholders signed up by the company doubled in 2015. A key issue appears to have been the “referrals” system, where customers were offered hundreds of dollars’ worth of Coles and Myer gift vouchers in exchange for the contact details of their friends, colleagues and family – just as Marika was, although she says the promised vouchers never materialised. Almost half of Let’s Insure policies sold in 43 “Aboriginal postcodes” were referrals, as opposed to about 8 per cent elsewhere in the country.
“Getting funeral money is always a big issue,” says author Richard Trudgen, who has spent more than 40 years living and working in remote NT communities. “People go to ALPA [Arnhem Land Progress Aboriginal Corporation co-op stores], they go to land council, they go to anybody … So when an insurance company comes along and says, ‘Oh, look, we’ll pay for your funeral expenses, you just pay us a little bit every month’, people go, ‘That’s a good idea.’ ”
A widespread lack of financial literacy across the Top End has left the door open for insurance providers to operate largely unchecked, Trudgen says. “It’s unconscionable, people don’t know what they’re getting into.”
The numbers suggest funeral insurance has proved lucrative for providers in remote Indigenous communities. In one case study presented to the commission, a mother paid $18,000 in funeral insurance premiums for herself and her daughters – both just babies when the policy was bought in the 1990s.
Since January 2008, the Australian Securities and Investments Commission (ASIC) has received 37 complaints from Aboriginal and Torres Strait Islander consumers relating to funeral products, with 26 of these specifically in regard to sales practices – such as the targeting of children from birth. Of all funeral insurance policies sold to Indigenous buyers, ASIC found 50 per cent of policyholders were under the age of 20.
Another company questioned at the commission hearings was Gold Coast-based funeral insurance provider Aboriginal Community Benefit Fund (ACBF), which offers a specific “Aboriginal community funeral plan”. The insurer’s chief executive, Bryn Jones, spent two days trying to defend what counsel assisting Rowena Orr, QC, at one point called the company’s “misleading and deceptive” business practices. Slumped in his seat, Jones pushed back on allegations ACBF targeted children. However, ACBF’s corporate structure means the company is exempt from anti-hawking legislation banning door-to-door pitches. This legal loophole enables its salespeople to sell direct to the consumer in remote communities – a tactic Jones pledged the company is “transitioning” to stamp out.
“Do you accept that your sales representatives, when signing up individuals, make inquiries of the individual about whether they have children or grandchildren and attempt to sell funeral policies for them?” Orr asked Jones.
“I’m unaware of the grandchildren. But children, yes,” he replied.
About 4900 of the 13,460 funeral policies offered by ACBF – more than a third of its total policies – are specifically tailored to Indigenous youths under the age of 18. “There are times when individuals have had children – or they know of people who have had children or grandchildren – pass away and they can’t meet the cost of their funerals,” Jones said. “And that in itself … is a huge indicator for people to take out policies.”
Jones was also quizzed about his company’s marketing tactics, which came under scrutiny for potentially giving prospective customers the false impression it is an Indigenous-run organisation. Orr pointed to the ACBF website home page – decorated with ochre shades and photos of smiling Indigenous families – as an example of the issue. Revealed in the fine print is the fact the business isn’t associated with any Indigenous or government organisation – a disclaimer still not placed on a number of the firm’s marketing materials, the commission heard.
Tracey Lee Walsh, of Mooroopna, Victoria, had signed up to ACBF’s funeral plans after picking up a brochure rimmed by pictures of the Rainbow Serpent. “[I thought it] was an Indigenous organisation because of the word ‘Aboriginal’ [in the company’s name],” Walsh told the commission. “At no stage was I told they were not.”
Walsh had been locked in a lengthy legal battle with ACBF over the misleading nature of the funeral policy she was signed up to. She has since settled the matter, but took a parting shot at the insurer during her testimony to the commission.
“I’ve got elders that have been in these funeral funds for years, and they plan to give their money to their families, so they can survive … Now, these elders will go to their grave not knowing how hard it would be for these families,” she said. “People haven’t been told the truth about these policies.”
This article was first published in the print edition of The Saturday Paper on Jul 7, 2018 as "Overtly insured". Subscribe here.