FSCS to cover £250,000 losses as credit unions default
The Financial Services Compensation Scheme (FSCS) is set to compensate members of Worcestershire Credit Union Limited and the Caribbean Parents Group Credit Union Limited after both were put in default yesterday (23 June).
Worcestershire Credit Union Limited has approximately 720 members with accounts totalling some £118,000, while Caribbean Parents Group Credit Union Limited has just over 180 members with accounts totalling some £135,000.
Declaring both credit unions in default means the FSCS "is satisfied that the credit unions are unable, or likely to be unable, to pay back its members' deposits".
Members of both credit unions will be entitled to compensation of up to £85,000 each, and will not need to complete an application form to make a claim.
The FSCS said that it is "working with the credit unions to get the information it needs to pay back depositors quickly". The FSCS aims to pay compensation within seven days and pay an remaining claims, which are likely to be more complex, within 20 working days.
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 for the Worscestershire Credit Union by 1 July 2011 and for the Caribbean Parents Group Union by 30 June 2011.