Savers have been assured that they will have their money returned by the Financial Services Compensation Scheme (FSCS) after administrators were called in at London-based Polish Credit Union UK Limited.
A single-branch credit union has more than 500 members
Launched in 2013 to provide loans and savings accounts to the Polish community, the credit union, which has only one branch in West Ealing, London, now has over 500 members.
Savers reassured their money will be returned to them
Those saving with the credit union have been told that they will get their money back after the FSCS declared the credit union in default.
Dean Watson, a specialist in credit unions at UK-based insolvency advisors Begbies Traynor, has been appointed as Administrator. He told savers that they would not need to do anything to get their money back.
Savers should receive a letter and monies in the post
Watson confirmed that anyone with a deposit with the credit union should receive a letter, together with monies, in the post from the FSCS.
Customers with less than £1,000 were told that they would need to get the cash from their local Post Office after receiving the letter from the FSCS. Savers with over £1,000 would be sent a cheque in the post.
Watson reassured savers that the Administrator’s “immediate priority” was to work with the FSCS to ensure that money was returned to its rightful owners, as quickly as possible. Anyone with any questions or concerns can contact staff from both the Administrator and the credit union.
Begbies Traynor confirmed that it had issued a letter to all members of the credit union containing FAQs, as well as putting up a statement on the website of the credit union, with a link to the FSCS statement.
The case highlighted challenges many credit unions face
“This case shines a light on the challenges that many credit unions face in engaging new members and responsibly increasing loan books required to ensure viability and regulatory compliance,” Watson continued.
The FSCS confirmed that it had sent payments totalling more than £300,000 to nearly all customers, within 48 hours of the failure of the credit union.
Savers reminded of savings protection rights
Alex Kuczynski, Director of Corporate Affairs at FSCS, said:
“FSCS is here to protect members of Polish Credit Union (UK) Limited. Your savings are protected up to £85,000, and joint accounts are covered for £170,000. You should get your money back within seven days”.
Kuczynski also reminded savers that as the process was automatic, there was no need to apply for compensation.