Financial counsellors say a Kimberley woman has set an important precedent after winning her case against a funeral insurer accused of targeting vulnerable Indigenous communities.

The Aboriginal Community Benefit Fund, now known as Youpla, is under investigation by the Australian Securities and Investments Commission (ASIC) for alleged misleading conduct, including claims it falsely marketed itself as an Aboriginal-owned organisation.

ACBF operated in the eastern states, but financial counsellors also uncovered several clients based in Western Australia's Kimberley region, home to one of the country's highest concentrations of remote Aboriginal communities.

Michelle Rex, who lives in Djarindjin about two hours north of Broome, signed up following a door-knock by ACBF representatives in 2007.

She had been paying fortnightly premiums for more than a decade before she became aware the fund was not a savings plan as she had been led to believe.

It was estimated Ms Rex paid more than $8,000 over nearly 12 years when her benefit amount was capped at $6,000, and she struggled to cancel her plan with ACBF without losing the full amount she had paid over time.

Ms Rex took her complaint to the Australian Financial Complaints Authority in 2019 with the help of Broome financial counsellor Veronica Johnson — AFCA found in favour of Ms Rex last month.

'Misleading conduct' slammed

In its determination, the AFCA outlined how Ms Rex was at risk due to her own limited education and her cultural responsibilities to ensure her children had enough money to pay for their own funerals in the future.

"It is unlikely she would have understood the true nature of the plan and the obligations it imposed … ACBF's conduct was misleading, deceptive and unconscionable," the determination reads.

It was found the company had not done enough to inform Ms Rex it was not Aboriginal-owned and did not operate as a fund set up for a community benefit.

The authority ordered ACBF to refund Ms Rex the premiums she paid of $8460.50, including interest backdated to when her complaint was first made.

Ms Rex said she was over the moon with the outcome and hoped her case would set a precedent for other people in the Kimberley who had launched their own complaints with the provider.

She said she hoped to put the funds toward building a safe space in Djarindjin for people with mental health issues.

"It's a passion I have inside to help my people in the community and to [better] recognise mental health," she said.

"[I want to build] a place for them to go to because there's nothing here for them at the moment."

Ms Johnson said she was assisting six other people in the Kimberley with accessing legal representation, while also helping three others escalate their complaints to AFCA for consideration.

"I feel wonderful for Michelle," she said. 

"I think what this is doing is really building confidence that we can achieve something together … this is just a really positive [outcome] that encourages us to keep going."

Complaints taken seriously

In response to previous concerns around its operations, Youpla said it took complaints very seriously.

"We would encourage those individuals to contact us to resolve their complaint as the conduct described does not align with the principles or policies of Youpla," a statement said.

"We encourage all members who are unsatisfied with the product or service of Youpla to contact us."

The company said it was focused on the continued improvement of its products and its focus was on meeting the needs of its customers.

Youpla said that since late 2018, it had been 50 per cent Aboriginal-owned.