18th February 2013
FSCS aims to pay back majority of members within seven days
More than 2,100 members of the failed Cornwall and Isles of Scilly Credit Union will get their money back within seven days (18 February 2013) after the Financial Services Compensation Scheme (FSCS) declared it in default today. FSCS is acting to protect the members of the credit union with five branches in Cornwall which closed for business on Friday.
Cornwall and Isles of Scilly Credit Union members will not have to lift a finger to get their money back, says FSCS. The process is automatic and the Scheme aims to start sending payments to people in the next few days.
FSCS protects consumers when UK regulated banks, building societies or credit unions go bust. It has come to the aid of more than 4.5m people, paying out £26bn since 2001.
People have about £569,000 in the credit union. People with less than a thousand pounds will receive a letter to get cash over the counter at the Post Office. Anyone with more than this will receive a cheque. This gives people their cash back quickly and gives them the most options for depositing it elsewhere, FSCS says.
The credit union, which is also known as Cornish Community Banking provided loans, savings accounts and current accounts. Its collapse means that members with current accounts will lose access to them and any payments coming out of the accounts will not be made. About 309 people are affected and will need to make other arrangements.
Kate Bartlett, FSCS Director of Operations, says “The Financial Services Compensation Scheme is ready to protect the credit union’s members. We’ll get your savings back to you within seven days and you won’t even need to lift a finger. Your money is safe up to £85,000. So there is no reason to worry; you will have your savings back soon. FSCS is protecting you.”
FSCS has a record of responding quickly to credit union failures. It pays the vast majority of claims well within its seven day target and complicated claims within 20 days. It uses credit union records to pay people back their money.
The insolvency practitioner handling the winding up of the credit union is Chantrey Vellacott DFK. More information is available on the credit union website.
The financial services industry funds FSCS. It was set up by government and is free to consumers.
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