Handsworth Breakthrough Credit Union Members to Receive Compensation
Members of Handsworth Breakthrough Credit Union Limited can expect to receive compensation from the Financial Services Compensation Scheme (FSCS) this week.
The credit union was declared in default today, 5 January 2012. Declaring the credit union in default means the FSCS is satisfied it is unable, or likely to be unable, to pay back its members’ deposits.
The FSCS is working with the credit union to get the information it needs to pay back depositors quickly, and will aim to pay compensation to the vast majority of members within seven days. Any remaining claims, which are likely to be more complex, will be paid by the FSCS within twenty working days.
Handsworth Breakthrough Credit Union Limited has approximately 365 members with accounts totalling some £206,000.00. Members of the credit union will be entitled to compensation of up to £85,000 each, and will not need to complete an application form to make a claim.
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.
Members of the credit union with ISA accounts will not lose their tax-free status. The FSCS expects those members to be sent a certificate showing the balance they had saved in their ISA on the date the credit union was declared in default. This will enable those members to reinvest their funds with another ISA manager of their choice.
The FSCS will provide a further update on its website by 13 January 2012.