Members of Gallowhill Credit Union to receive compensation in the next seven days

7th September 2011

Members of Gallowhill Credit Union Limited can expect to receive compensation from the Financial Services Compensation Scheme (FSCS) in the next seven days, after the credit union was declared in default yesterday, 6 September 2011.

The FSCS is working with the credit union to get the information it needs to pay back depositors quickly. The FSCS will aim to pay compensation in the vast majority of cases within seven days, and pay any remaining claims, which are likely to be more complex, within twenty working days.

Gallowhill Credit Union Limited has approximately 141 members with accounts totalling some £132,000. Declaring the credit union in default means the Scheme is satisfied that the credit union is unable, or likely to be unable, to pay back its members’ deposits.

Members of the credit union will be entitled to compensation of up to £85,000 each, and will not need to complete an application form to make a claim. Once the FSCS has the information it needs about each member’s account, it will make compensation payments automatically. In most cases, compensation will be paid by cash over the counter through Post Offices for amounts under £1,000 and by cheque for anything above that figure.

The FSCS will provide a further update on its website by 15 September 2011.

Jargon Buster

  • Credit union

    a financial co-operative which is owned and controlled by its members.
  • Deposits

    money placed in a bank or similar institution to earn interest or for safe-keeping.
  • In default

    A firm unable, or likely to be unable to pay claims against it. This will generally be because it has stopped trading and has insufficient assets to meet claims, or is in insolvency.