A SORRY BUSINESS
In 2017, a gathering of Indigenous elders, academics, delegates and activists from across the country asked Australians to listen to them.
In time, it is hoped that the Uluru Statement from the Heart will be seen as the most important political document produced in Australia for decades. At its core the statement is a demand to be heard. It holds out an invitation to non-Indigenous Australians to walk with their Indigenous brothers and sisters into a shared future.
The statement is also an invitation to speak together. The overwhelming conclusion from decades of policymaking targeting Aboriginal Australia is that long-term failure has been caused by a lack of Indigenous voices in the legislative process. Put simply, white Australia has not listened to Indigenous Australia.
The Uluru Statement was dismissed by the Turnbull Government with no consultation. The way its central proposal—the establishment of an Aboriginal advisory body to parliament—was shunned without so much as a batted eyelid from the government was not so much a break with tradition as a continuation of the status quo. Since settlement, mainstream Australia has made decisions that are then foisted on Indigenous people, barely listening along the way.
The treatment of Aboriginal people at the hands of the financial sector has been much the same.
Without a doubt, most of Australia has been generally well served by its financial industry. It has enriched large swathes of society with the ability to finance home ownership, fund business loans and drive decent levels of retirement savings. But the system is purpose-built with the overwhelming majority in mind. The 3 per cent of Australians who identify as Aboriginal or Torres Strait Islander can find themselves underserved by the sector or, at worst, discriminated against.
For hundreds of thousands of First Australians that live in regional and remote communities, the situation is often the latter. In the Northern Territory, for instance, 80 per cent of Indigenous Australians live outside the Darwin capital city area. Just as they are likely to face difficulty in getting the services that are enjoyed by the rest of the country, dealing with the financial system can be just as, or more, difficult. Often, Indigenous people don’t start on an equal footing with mainstream Australians when they go to deal with a bank.
Being sidelined from the economy through many generations has left little in terms of wealth being passed down in many Indigenous families. Although many historical policies are now no longer in place, Aboriginal people were for generations excluded from accumulating wealth, home ownership or running a business, and this history continues to burden the current generation.
Currently, Indigenous Australians are twice as likely to be unable to access products that are right for them, or that are affordable. Because of this financial exclusion, more and more Aboriginal people are forced to turn to predatory payday lenders and dodgy credit salespeople who charge crippling interest rates for tiny loans. Aboriginal and Torres Strait Islanders locked out of the mainstream lending system have ‘become a captive market’ for these black economy credit providers, which include hotels, stores, hawkers and taxi drivers, according to Australian National University academic Siobhan McDonnell.
The absence of wealth and financial engagement can be traced back over many decades. Aboriginal people were forced from their land more than 200 years ago, dispossessed and marginalised. Then, missionaries took to replacing traditional customs with skills for a ‘new economy’, such as forcing women to cook, clean and mend clothes for white homes.
The depressing irony is that the early white Australian economy relied on Aboriginal labour. Men were put to work on livestock stations but were never paid like their white brethren. Instead, they received payment in food scraps, alcohol and basic housing such as corrugated-iron humpies. Into the early 1900s in Queensland, the government withheld wages or systemically underpaid Aboriginal workers, who could work all their lives and see very little of their own money. Others were subjected to ‘income management policies’, barred from making decisions about their own finances and thus never learning how financial products worked.
All of this makes attempting to deal with the current complexity of the superannuation system worse for Indigenous Australians than for non-Indigenous people. Even for non-Indigenous Australians, the system is often an opaque mystery.
For many Indigenous people who were subjected to debentured labour policies under previous governments, large chunks of their salaries were sequestered off into trust accounts and referred to as ‘stolen wages’ by Indigenous workers. In some communities today, superannuation is still contextualised as stolen wages. For a worker who had their wages taken away from them all their life to one day learn that they have a large savings account they can only access once they’re old is bemusing, to say the least.
As Indigenous people were excluded from the mainstream financial system, their traditional kinship arrangements not only survived but were relied upon. The accumulation of wealth among Aboriginal people in remote communities is found primarily in forms of social capital, such as connections to traditional country, rituals and intergenerational knowledge. Material forms of wealth, such as cash and consumer goods, are shared through cultural obligation among a community that is tied together by land and kinship. It has been this way for up to 60,000 years. ‘Money has only really been in Aboriginal and Torres Strait Islander society … [for] just on three generations,’ says Lynda Edwards, a Wangkumara woman and financial capability coordinator with Financial Counselling Australia.
Although the superannuation system affects almost everyone earning a wage in Australia, for an Aboriginal person, negotiating the system can be like trying to struggle against a heavy river. ‘You’re just tired from swimming upstream and so you give up. And by giving up, you’re losing out on things that could actually benefit you,’ Edwards says.
Financial counsellors report spending 90 per cent of their time with Indigenous Australians in trying to access their superannuation. On average, their superannuation balances are just under half of those enjoyed by other Australians.
One woman who approached Edwards for help gaining access to her super account needed the funds to help pay for dental work that was expected to cost $20,000. It took six months for the super fund to finally approve the early release. ‘Although getting the dental work done would cure the pain she was suffering, the most important reason for it was so she could smile in photos with her family,’ Edwards says. ‘Her daughter was murdered and there aren’t any good photos of them together smiling. The main purpose of getting the money for the dental work was so she could create positive memories through photographs of her and her family for her grandchildren.’
Centuries of deliberate destruction have left deep scars throughout Aboriginal communities, but calculated discrimination has given way to a situation of indifference and neglect. What often starts with the best of intentions languishes as lip service. Australian financial corporations parade around Reconciliation Action Plans and preside over policies that, at best, fail to properly serve Indigenous people in remote areas, and at worst, actively discriminate.
It’s often cheaper to fly to Los Angeles on short notice than to book an unexpected flight to Darwin from one of Australia’s southern capitals. Despite this, the royal commission decided to take its travelling tour of public hearings to the top end of the Northern Territory.
It was more of a symbolic decision than a practical measure. The commissioners wanted their visit to such a remote part of the country to be instructive—to show there was a need to travel to see the people affected by the bank’s policies.
Unfortunately, the royal commission would be fighting to gain the attention of the public. The round of hearings coincided with a particularly special Territory Day—the fortieth anniversary of the moment the NT had been granted self-governance. About 370 tonnes of fireworks were ignited on the NT’s infamous cracker night the Sunday before the week of hearings, leading to twenty-seven injuries, 770 calls to emergency services and nearly 700 grass fires across the territory.
Sky News had flown its presenter Paul Murray to Darwin specifically for the occasion to revel in the festival and its lack of nanny-statism. He was recording live when Territorians fired roman candles at him, forcing him to run away from the camera and dodge small explosions. That week, the front page of the local NT News tabloid newspaper read: ‘Why I Stuck a Bunger in My Bunghole’—a not-so-subtle nod to its 2012 Walkley Award–winning effort, ‘Why I Stuck a Cracker Up My Clacker’.
Territorians reading the same paper in search of an account of the royal commission’s hearings at the Supreme Court of the Northern Territory that week would have been forgiven if they couldn’t find an article. The commission was given far less carriage than the wreckage and fires sparked by cracker night. For some news organisations, Darwin was a four-hour flight too far to send their reporters for a week to cover the royal commission. Still, the ABC, Sky News, the Australian Financial Review and The Australian sent people from Sydney and Melbourne to cover the events.
However, there was much less public interest in the commission’s inquiry into Indigenous financial issues than in the Territory’s cracker night, and as such, the coverage lacked the same penetration as previous rounds.
It wasn’t because of a lack of galling tales.
The royal commission heard about Cairns-based used-car salesman Colin Hulbert, who sold old cars on the verge of breakdown to Aboriginal customers who had recently come into money from relief payments made to victims of Cyclone Yasi. Hulbert sold car loans at interest rates of 48 per cent, the highest legal rate, preying on his customers’ misunderstanding of how interest rates worked: a number of them believed that the higher the interest rate, the better the deal.
Then there was Sydney-based life insurer Select AFSL, which sold thousands of funeral insurance policies through high-pressure cold calls to Indigenous Australians. Kathy Marika, a sixty-year-old Arnhem Land woman, was wrongly signed up to the policies along with her seven children and grandchildren. Select AFSL had plied its army of British backpacker telemarketers with rewards such as shopping vouchers, Vespa scooters and a cruise to the Sunshine Coast as incentives to sell as many policies as possible. Chief executive Russell Howden attempted to hide this behaviour from the royal commission when it began asking for documents.
While there were many examples of Indigenous customers being ripped off, the Darwin chapter of the royal commission’s hearings lacked the financial power of other rounds of hearings, during which billions and millions in wrongly gained windfalls were revealed. Rather, it was probing individually tiny amounts of money that had been sucked out of the hands of Australians who needed to make every dollar count.
The recently installed ASIC boss James Shipton made a surprise visit to the commission’s first day of hearings in Darwin. He was there under the guise of being in town to meet with the watchdog’s regional NT commissioner, Duncan Poulson. But Shipton was leading by example and wanted it to be known. He wanted more executives from southern capital cities to go out to remote and regional Australia and see how their policies were affecting a certain slice of their customer base.
‘I do not want any sector of our society, including our First Australians, not having access to the full benefit of our financial system; nor do I want them to fall victim to unscrupulous behaviour,’ Shipton told me at the end of the week of hearings. ‘I want to encourage financial firms, especially their senior leaders, to actively engage in closing the financial inclusion gap in remote and Indigenous communities. And by that I mean coming to remote areas, meeting local people, listening to the issues they face and understanding the barriers they encounter.’
When it launched its 2016 Reconciliation Action Plan, ANZ decorated the pages of the document with the artwork of Emily Anyupa Napangardi Butcher. ‘The symbolism depicts a future where people and communities thrive by coming together, with ANZ’s core values at the centre,’ the bank said. However, the goodwill it had in its reconciliation plan was of little consolation for Thy Do, a family support worker at Save the Children.
Do was based in Katherine in the NT when she attempted what she thought would be a simple task to open a bank account for a client, a Dalabon woman who was a single mother of three and lived an hour and a half outside the town. The banks around Katherine were already known as having a curious resistance to serving people who came in from the surrounding communities, but Do did not expect it would take ANZ four months to open a basic fee-free bank account for her client.
The arduous attempt to open the account began after the Aboriginal woman, who struggled with English and relied on Centrelink benefits for income, discovered she was being charged regular direct debits by a photography-package scam that was known to other Aboriginal and Torres Strait Islander people. It routinely preyed on isolated communities, where photographers would offer to take pictures of Indigenous Australians for a small fee. After they signed over their bank account details, the fee would be debited from their account over and over again.
This particular woman, who couldn’t be named for legal reasons, was being stung with $200 a month in fees, including dishonour and overdrawn fees, and fees for checking her balance. For many in remote communities, fees for checking a bank balance at an ATM can escalate quickly when they are waiting for their welfare payments to arrive.
Travelling to Katherine to set up the new bank account was no small feat for this woman. Her community of about 400 Aboriginal people had no bank and just a single communal computer at the local council office, and it was often cut off from Katherine during the wet season.
When the woman went with Do to the ANZ branch in town, she was told by a staff member that the bank no longer offered the fee-free account. This seemed strange. Afterwards Do phoned the ANZ call centre, which informed her that the account did, in fact, still exist. So she and the woman scheduled another meeting with the ANZ branch. After organising the account, the woman discovered that ANZ had opened a savings account attached to another account that attracted monthly fees and overdraft fees—not what the woman, who was trying to escape overdraft fees, wanted.
After Do complained again, ANZ opened a pensioner’s account for the woman, which still attracted fees. It added insult to injury when she was then told she couldn’t change the account to a fee-free account without a password verification. To do this she would have to return to Katherine again.
It took four months and a formal complaint to ANZ before the woman was eventually set up with a basic account, and another two months for the bank to send her the debit card so she could actually access the account.
‘It’s been a long, confusing, frustrating process. It never crossed my mind that it would be this difficult to open a bank account,’ Do told the royal commission. ‘The last time I opened a bank account for myself it took me two minutes, and I did it on my laptop. There are particular cultural, language, geographical barriers that are experienced by Indigenous consumers in and around Katherine that, perhaps, weren’t taken into consideration by ANZ staff members.’
This case is instructive regarding the way in which many Indigenous Australians are treated by financial institutions. While many Indigenous Australians receive the same unremarkable treatment as the rest of the country when they enter a branch, those in remote communities can be severely underserved. There is as much diversity among Aboriginal and Torres Strait Islanders, in terms of financial knowledge, as there is in the broader population. However, a small but significant chunk of the Indigenous population lack the English skills needed to feel their way around an increasingly complex financial system. Many of them have suffered, too, from generations of poor policy developed by government and businesses. Australia’s biggest banks can be armed with all the goodwill in the world and still fail to devote proper resources to understanding the needs of hundreds of thousands of Aboriginal people who live in traditional communities.
The government is also responsible for designing financial laws that are out of step with the reality of remote life. These can affect the simplest things, such as the need for a banking customer to provide identification documents with a name and address. For many Indigenous people, a driver’s licence is unheard of and births, deaths and marriages are unregistered. Then, when birth certificates are issued, many don’t display the names Aboriginal people understand to be theirs. Many have standard birthdates such as the first of January or July in the year that is a best guess of the year of birth.
Some Aboriginal and Torres Strait Islanders have traditional skin names, different birth names and an adoptive name. If they do hold formal identification, all three versions of their name can be seen printed on different documents. Where this leads to difficulty with the Australian banking sector is with anti-money-laundering laws, which require lenders to fully identify their customers using a range of documents that corroborate the same information. For many Indigenous Australians in remote communities this is impossible, and it means they are locked out of the financial system.
Financial regulators have only recently put in exceptions to these rules, which are known as Know-Your-Customer (KYC) laws. Banks can now accept a letter from a community elder as ID. However, these exceptions to the laws aren’t widely promoted or known about within many financial companies. ASIC is often forced to step in and remind firms that there are exceptions for documentation rules when Aboriginal Australians are locked out. Top executives might be aware of the exceptions but front-line staff might have no idea, and customers are turned away when they simply want to engage in the economy like the rest of the country.
‘While the guidance is there, and we see commitment to implementing it by the financial services industry, we’re still not seeing a real reduction in the difficulties that people are having identifying themselves on the ground,’ said Nathan Boyle, ASIC’s Indigenous policy analyst. Boyle, a Wiradjuri man who grew up on Biripi country, has been working on financial services issues for Indigenous Australians for the past decade and helps companies to improve their understanding of Aboriginal and Torres Strait Islander customers.
Not only is documentation an issue for Aboriginal customers, but questions that might seem simple to the majority of Australians have no relevance to customers in the bush. What is your street address? In remote communities, there are no street names. ‘They will be asked three or four times what the street address is, whereas if they were asked, “What number is on the front of your house?” then they can answer that question,’ Boyle said.
For Boyle, some problems could be easily solved. Something as simple as a map of the local area in a bank branch could help staff members work out whether a customer is coming from a remote community and might benefit from a fee-free bank account. It’s a simple solution, but not something that has been taken up by the industry.
‘I think the biggest change that would really benefit things for Indigenous consumers is if there was a concerted effort to make sure all of the members of that service, right down to the coalface, to the people who are on the telephone or who are dealing face-to-face with Aboriginal and Torres Strait Islander people, are aware of the policies that have been agreed to by the industry,’ Boyle said. ‘What I would really love to see is more executives from banks, and more policymakers from banks and from financial services institutions who are making these policies, going out to Aboriginal communities to see how the policies are actually working on the ground.’
Lynette Melcer believed her company treated all its members equally. Melcer, the head of technical advice at the $95 billion superannuation fund giant QSuper, had little reason to think otherwise. Established by the government in 2013, the fund operated on a not-for-profit basis and was delivering in spades for its savers.
Melcer’s beliefs changed when she travelled to Lockhart River in Far North Queensland in 2014. It’s a community of 600 people about 2500 kilometres from Brisbane. To get there, you need to take a flight from Brisbane to Cairns, then another regional plane. ‘Lockhart River is a beautiful place. Life is quiet, I suppose. I wouldn’t say harsh, but it’s not city life at all,’ Melcer said. ‘Driver’s licences didn’t exist, passports didn’t exist. People who did have driver’s licences or birth certificates, often they were wrong.’
Even getting a justice of the peace to certify a photocopied picture was difficult for the locals. One man who brought Melcer a photograph for identification had to have the document lightened because the picture was too dark to show his features. ‘He looked at it, he looked at me and he laughed. He said they don’t make photocopiers for blackfellas,’ she recounted.
When Melcer travelled to Anangu Pitjantjatjara Yankunytjatjara, the problems were compounded. In the APY Lands, nestled in the corner of South Australia that butts up against the state lines of Western Australia and the NT, the 2500 residents who call the area home only recently had mobile phone towers switched on for the first time.
‘Most of the people in those communities don’t speak English at all, so we had to work through interpreters,’ Melcer said. ‘I learned that there is no Indigenous word for superannuation.’
According to Melcer, these problems are not understood or dealt with unless executives have on-the-ground experience. ‘I thought we did everything for members and I thought we treated all our members equally,’ she said. ‘Going out to the communities made me see how hard life is there, and how equal isn’t the same for everybody.’
Rather than pouring more resources into regional and remote areas, Australia’s banks are deserting hard-to-reach parts of the country. Closing bank branches in remote communities has removed one of the last physical connections the city-based corporations have with people on the land. Over the past decade, 2000 bank branches have been closed across the country, and these closures have affected regional areas more than metropolitan centres.
The community of Mutitjulu, at the base of Uluru, is 470 kilometres from its nearest bank branch.
ANZ’s retail branch network across the entirety of northern Queensland and the NT is overseen by one executive: Tony Tapsall. His responsibility covers a region three times the size of Texas, and many of his 130,000 customers live in remote communities. ANZ has almost twenty branches in remote communities across Australia, and five are under the watch of Tapsall. It’s an enormous expanse of land to manage in a responsible way.
Over the course of Tapsall’s evidence to the royal commission, it became clear that despite the best of intentions, ANZ had been treating its Indigenous customers with at best indifference, and at worst neglect. Staff members in its remote branches had not been given any specific training in assisting Aboriginal or Torres Strait Islander people. Instead, ANZ had put a lot of effort into making sure its frontline staff were pushing as many products onto customers as possible, irrespective of the customers’ situation.
Staff at the Katherine branch had been coached in making sure they performed the so-called ‘A to Z review’, which took prospective customers through an arduous process of listing all the financial products the bank has in order to sell them new things they want or have come to the bank to get. The woman who made the three-hour round trip to Katherine with Thy Do was forced to go through such a review.
Rather than simply listening to what a customer requests, Tapsall said the A to Z review was the key to unlocking exactly what a customer wants. ‘It’s what our bankers will go through with a customer, whether new or existing, to discuss the customer’s needs,’ he told the royal commission. ‘It’s a tool to support a conversation between the banker and the customer. It’s used, as I said, as part of the conversation to understand a customer’s need and goal.’
According to the Finance Sector Union (FSU), bank staff are barely encouraged to offer fee-free accounts. The overwhelming pressure on front-line branch staff is to promote the products that are most profitable for the bank. ANZ has its A to Z review, NAB has a customer ‘Mindmap’, and Commonwealth Bank leads its customers through a ‘Financial Health Check’. ‘There is nothing … that would vary by reference to where the employee worked,’ the FSU said in a submission to the inquiry. ‘The requirement to conduct these reviews is the same for the employee at the Toorak or Point Piper branch as it is for the employee at the Katherine branch.’
In the case of several ANZ account holders on Groote Eylandt, a large island in the Gulf of Carpentaria off the NT coast, customers were given access to informal overdrafts without asking if this was what they wanted. These ‘shadow limit’ overdraft accounts were causing headaches for the people living on Groote Eylandt, which is home to about 3000 Warnindhilyagwa people. One man who was on Centrelink benefits was charged nine overdraft fees in the space of two weeks by ANZ, costing him $54. He did not know how an overdraft worked and had not asked for one. If customers went more than $50 into the red, they could be hit with interest rates of up to 17 per cent on the overdrawn amount as well as a fee of $6 a day—up to a maximum of $60 a month. While these numbers may seem insignificant to many capital-city customers, they are punishing sums for people who rely on welfare.
ANZ had only recently made changes to exclude people who receive Centrelink benefits from the informal overdrafts, but it was having trouble implementing the change. Tapsall was taken to documents showing the Groote Eylandt man’s bank account. Centrelink payments were coming in, and then money was going straight back out to pay the bank its fees. ‘Would you give this customer an overdraft?’ Commissioner Kenneth Hayne asked.
‘No,’ Tapsall said. And yet, ANZ had given the customer an overdraft without him asking.
‘Isn’t there a tension between giving clients informal overdrafts when, if they applied for the overdraft, you would say no?’ Hayne said.
For more than 200 years, Indigenous Australians have been grappling with a frontier financial system brought by European settlement.
Former High Court justice Michael Kirby has said a charitable interpretation of the relationship between non-Indigenous and Indigenous people since 1788 is ‘a tale of indifference and neglect … A less charitable interpretation is that it represents a cruel assertion of power: sometimes deliberate, sometimes mindless, resulting in the destruction of Aboriginal culture, unparalleled rates of criminal conviction and imprisonment and massive deprivation of property and land.’
If ANZ’s treatment of remote customers was indicative of indifference and neglect, the behaviour of a company called Aboriginal Community Benefit Fund (ACBF) typified the cruel assertion of power.
ACBF was already on the radar of financial watchdogs before the royal commission. The company was in the business of selling funeral insurance, and for nearly three decades it had travelled around the country selling its policies to Aboriginal and Torres Strait Islander people. In the process, it had signed up thousands of children and babies to funeral plans. The policies could cost customers close to $100,000 over a lifetime, depending on how many lives were insured under the policy. If the customer missed a single payment, the entire funeral benefit and any money paid to the company were seized. The customer lost everything.
Before the royal commission, I spoke to a woman who had been sold a funeral plan by ACBF in 1998. Tania Porter was at home when a stranger knocked on her front door. The representative from ACBF convinced her to buy funeral policies for herself, her partner and her family of seven young children. Porter’s youngest son, Anthony, was just two years old when he was signed on to the funeral plan.
Porter lived out in Moree, more than 600 kilometres north-west of Sydney. It was a long way from the Gold Coast, where ACBF was based. She couldn’t recall every detail of the conversation with the man who signed her up to the policy, but remembered he was a ‘real big fella’. When ACBF couldn’t find Indigenous Australians to do its door-to-door sales, it often drafted in people who had dark skin or appeared to be Aboriginal.
‘They told me if one of my family members died, like my brother or sister, it could help,’ Porter said. ‘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.’
Porter’s cousin-in-law, who was at her house that day, signed up too. They passed over their bank details, and their Centrepay benefit details too. ACBF was kind enough to arrange to deduct the funeral insurance premiums straight from the welfare payments. That way, they wouldn’t miss a fortnightly bill.
Twenty years on and $22,000 later, Porter missed two payments. ACBF told her it would be ending her cover and she would get no refund.
ACBF claimed to be looking after Aboriginal communities, but it was doing anything but. The company was run by a Gold Coast family with no ties to Indigenous people or community groups, but from the way it presented itself to customers, you’d be forgiven for thinking otherwise—its advertising material and policy documents were replete with Aboriginal art and symbols such as the rainbow serpent.
The company was also geared towards providing a product for the Aboriginal cultural phenomenon of ‘sorry business’—the significant journey surrounding death in Indigenous communities. However, while it promised customers it would take care of the financial costs surrounding sorry business, the company was found to abandon policyholders at the first missed payment.
ACBF saw a morbid opportunity to profit from the cultural attachment to sorry business. The grieving process can extend for months after a death, often involving an entire community. Families will travel from all over the country to the place where a funeral is held and stay with the host family for weeks at a time. Many Torres Strait Islander people wait until a year after burial before laying a traditional headstone for the departed. Because of the weight attached to the mourning process, the price for a funeral can escalate into tens of thousands of dollars. The burden is often shared across kinship lines.
Over its three decades, ACBF sold policies to about 30,000 Aboriginal and Torres Strait Islander people. Over the five years to 2018, it cancelled more than 13,000 of these policies, clawing millions of dollars out of customers in the process.
In a sort of colonial irony, the founder of ACBF, Ron Pattenden, had come to Australia from Britain. The former pub manager set up ACBF in 1992. Not long after the company came into being it began to be targeted by regulators, but several legal actions failed to kill it. After each court case, ACBF would go back to the drawing board and find another loophole to exploit. This had the result of turning it into a complex web of interests that ended with its corporate structure crossing international boundaries.
In 1993, a year after ACBF was established, the NSW Department of Consumer Affairs forced it to split into two funds after Pattenden failed to register it under the proper Funeral Funds Act.
It lost a 1999 court case against ASIC over misleading its customers. ACBF was forced to stop using the Aboriginal flag on its advertisements and ASIC made it declare to any prospective customers that it was a ‘private company, not sponsored by or otherwise connected with any governmental or similar body or an Aboriginal organisation’. After the court case, global insurance giant AXA stopped underwriting the funeral insurance policies. When the insurance company became aware of ACBF’s behaviour, it said the relationship would no longer ‘be in either AXA’s or ACBF’s, or more importantly in the ACBF members’ best interests’.
After AXA pulled the plug on ACBF, no other insurer was willing to step in. In a bid to keep the company alive, Pattenden’s accountants, who were then represented by KPMG, told him to set up a holding company in Vanuatu. There, capital of just $200,000 was needed to set up the business—a cut price on the $5 million needed to license the company in Australia. From that point on, premiums paid by ACBF customers were funnelled out of the country and paid into a company called Crown Services in Vanuatu.
Then, in 2004, ACBF was hit by another Federal Court case brought by ASIC. This one forced it to stop selling funeral ‘insurance’ products. Anti-hawking provisions prevented door-to-door pressure selling of insurance products. Consequently, ACBF set up a ‘funeral expense policy’ in 2005 whereby the money went towards paying funeral costs to funeral service providers and not to the policyholder. Because it wasn’t considered insurance any longer, ACBF was able to skirt the anti-hawking rules.
While Pattenden helped keep the company alive from Vanuatu, the founder’s involvement in its day-to-day operation became the subject of uncertainty. According to a 2011 court case relating to a dispute between Pattenden and the Australian Tax Office, different arguments about the nature of his role had been put forward without a clear answer. When ACBF was asked to face up to the royal commission, it wasn’t easy to tell who was actually in charge of the company. Pattenden didn’t attend. Instead, ACBF’s fresh-faced chief executive, Bryn Jones, was sent to Darwin to answer questions.
Jones had only recently been put in charge of ACBF, getting the top job in December 2017 just a month after the government had announced the royal commission. This was despite his having no formal qualifications, no expertise in insurance, and no professional experience working with Indigenous Australians. Indeed, Jones, a muscular, blond young man, had previously been a children’s sports coach and an IT worker. He’d got the chief executive job after meeting Pattenden one time in a coffee shop. Pattenden was a banking client of Jones’s father, and Jones said Pattenden had suggested at their meeting some ways to ‘modernise the company’ and ‘combat some of the negative publicity’ circling it.
At the royal commission, Jones wasn’t able to shed much light on who was steering the ship. Michael Wilson, the ACBF chief executive before Jones, had ‘ceased all involvement’ with the company in November 2017, and Jonathan Law, a non-executive director of ACBF, was apparently not involved at all. Meanwhile, Pattenden’s appointment as director of ACBF ‘was made simply to comply with legislative provisions’ relating to the required number of directors on company boards, Jones explained.
Watching Jones in the dock at the commission could have given the impression that he was just a patsy for Pattenden. Indeed, the ABC’s Dan Ziffer put this question to Jones directly as the reporter chased him down the street after his examination.
As Jones was sitting in the witness chair with little knowledge of the company’s history or policies, counsel assisting the royal commission Rowena Orr was forced to pick through the inconsistencies in his responses and the information contained in his formal witness statement. ‘Did you write this statement, Mr Jones?’ she asked.
‘Obviously, it was in consultation with counsel and those that I needed to source the information from,’ Jones said. He said he was appointed because a ‘fresh and transparent’ perspective was needed at the company. When he got the job, he ‘immediately’ contacted one of ACBF’s biggest critics: the head of the Indigenous Consumer Assistance Network (ICAN), Aaron Davis, wanting to see what the company could do better.
‘Bryn and I met once at my office and I told him in no uncertain terms that until they stopped selling funeral insurance to children, ICAN would have nothing to do with them,’ Davis later told me. ‘I believe Bryn has a great ability to ease his conscience with Indigenous mortality stats.’
He was right. ACBF used the fact that Aboriginal Australians die on average roughly ten years younger than white Australians to bring a sense of urgency to its funeral policy sales. ACBF deployed these statistics to sell to children and young people in communities where they had little need for the product. The company even had a flat rate it charged babies and children whom it recruited to its funeral plans. It was a boon for business: about 30 per cent of ACBF policyholders were younger than eighteen, while a further 15 per cent were aged between eighteen and twenty-five. Anyone under seventy could be signed up for a policy—which was great news for Indigenous men, who currently have a life expectancy of just sixty-nine years.
In 2015, the federal government banned the ability of ACBF to take premiums straight out of customers’ Centrepay benefits. In a bid to survive, the company launched a Federal Court challenge to the decision and won. The ban on the Centrepay deductions was overturned by Justice John Logan, who believed it ‘paternalistic’.
When the government later appealed the decision, the ban was reinstated. The court action forced ACBF to abruptly end funeral expenses cover for about 6000 customers because it could no longer access the welfare payments. When the company attempted to call the customers to get new bank account information to continue to deduct money from them, it found it hadn’t actually bothered to keep track of where its customers were living.
Another of ACBF’s victims was Tracey Walsh, who hailed from Mooroopna, the town across the river from the city of Shepparton in Victoria. In 2005, she signed up to a funeral plan worth $8000 when her friend Leslie passed away. Leslie’s family had had to break into their superannuation to pay for his funeral, and Walsh didn’t want to leave the same burden on her own family.
An ACBF worker had left posters around her workplace, an Aboriginal cooperative, that were emblazoned with the rainbow serpent. Under the impression it was an Aboriginal company, Walsh signed on when the dark-skinned salesman came back. Despite the previous court case forcing ACBF to stop presenting itself as an Aboriginal organisation, the company had been advertising its policies on the National Indigenous Times website, in the Koori Mail newspaper, on national Indigenous radio services and in television ads without the disclaimer that it had no connection to the community.
After signing up, Walsh paid as much as $10,000 in fortnightly premiums to the company over the next decade for a policy that would cover only $8000 worth of funeral expenses.
When she found out that ACBF would not pay out the balance to her family as she expected, Walsh tried to cancel the policy. She was told in no uncertain terms that if she stopped paying the premiums, she would lose all the money. ‘They had me over a barrel,’ she told the royal commission.
Walsh complained to the Financial Ombudsman Service but ACBF, through its lawyers, attempted to force her to drop the complaint. Just days before ACBF was forced to face the royal commission, it settled the dispute and increased Walsh’s cover to $10,000 with no further premiums to be paid.
‘People are in the same position as me, that they think they will get all their money back,’ she said. ‘All I get at Christmas time is a bloody calendar. I’ve got elders that have been in these funeral funds for years, and they plan to give the money to their families so that they can survive. Now, these elders will go to their grave not knowing how hard it will be for these families. These people have been used and used and used over the generations and it’s just another profit making off our backs.’
The royal commission recommended finding ACBF had breached criminal laws regulating misleading conduct.
Despite the poor publicity at the banking royal commission, just a few months later ACBF was spotted spruiking its products and handing out toys to children at the Koori Rugby League Knockout in Dubbo. Small footballs emblazoned with the ACBF logo were being thrown around by children on the field. Alongside other stalls being operated by education providers such as universities, NSW services such as transport, and community services such as the Financial Rights Legal Centre and Mob Strong Debt Help, ACBF was handing out show bags with plush kangaroo toys displaying the company’s logo. The ACBF stall also featured a football-passing game and the chance to win a large-screen TV. An ACBF representative took down contact details for the company’s next victim.