FSCS credit union redress bill hits £5m on fresh collapse

CommuniSave Credit Union, also known as South Birmingham Community Credit Union, has been declared in default by the Financial Services Compensation Scheme, taking the number of failed credit unions this year to nine and the total redress bill to £5m.

The FSCS is stepping in to help the credit union’s 2,000-plus membership after CommuniSave became the ninth credit union to collapse this year and the 21st to collapse in two years.

Earlier this year (17 June) Portadown-based Carleton Credit Union became the eighth credit union to collapse in 2013. This latest default brings the total amount of compensation paid out by the FSCS in regards to stricken credit unions to almost £5m.

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CommuniSave members have a total of just over £1m deposited. People with less than £1,000 will receive a letter to get cash over the counter at their Post Office, while those with more will receive a cheque. The FSCS said most savers will get their money back within seven days.