The Financial Services Compensation Scheme (FSCS) has stepped in to protect the members of Strathkelvin Credit Union, which has stopped trading and is now in default.
The FSCS is aiming to compensate the 1,820 members of the credit union, based Kirkintilloch, within seven days. Using the credit union's records, FSCS will send each member a cheque for their balance automatically.
FSCS expects the total compensation for Strathkelvin Credit Union to be around £1.96m.
Caroline Rainbird, chief executive of FSCS, said: "We want to reassure members of Strathkelvin Credit Union and let them know that their savings are safe. FSCS has now stepped in and most members will receive their money by cheque directly from us within a few days.
"There is no need to make a claim, these cheques will arrive automatically to help members get back on track as soon as possible."
The credit union's administrators are Dina Devalia, Simon Bonney and Ian Wright of Quantuma Advisory.
Devalia said: “We are working with the FSCS to ensure that all members receive their money back as soon as possible - we’ll also be on hand by email or phone to assist members with any queries that they may have on issues such as loan repayments or setting up new accounts for benefits payments.”
Based in Dunbartonshire and founded in January 1996, the credit union acts as a financial cooperative offering its members financial security through saving and borrowing.
In 2019, Strathkelvin Credit Union recorded a turnover of £86,000.
It was known as Kirkintilloch Credit Union until 2003.
Before the FSCS can pay compensation, it must be satisfied that the credit union does not have sufficient assets to return money to eligible customers itself. FSCS describes this as being ‘in default'.
When a credit union is declared in default, the FSCS automatically compensates its eligible members up to £85,000 per person.
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