7th March 2013
FSCS aims to pay back the majority of members within seven days
Nearly 1,500 members of the failed Severn Four Credit Union will get their money back within seven days (7 March 2013) after the Financial Services Compensation Scheme (FSCS) declared it in default today. FSCS is acting to protect the members of the failed Bristol-based credit union.
Severn Four Credit Union members will not have to lift a finger to get their money back, says FSCS. The process is automatic and the Scheme aims to start sending payments to people in the next few days.
FSCS protects consumers when UK regulated banks, building societies or credit unions go bust. It has come to the aid of more than 4.5m people, paying out £26bn since 2001.
People have around £460,000 in the credit union. People with less than a thousand pounds will receive a letter to get cash over the counter at the Post Office. Anyone with more than this will receive a cheque. This gives people their cash back quickly and gives them the most options for depositing it elsewhere, FSCS says.
Kate Bartlett, FSCS Director of Operations, says “The Financial Services Compensation Scheme is ready to protect the credit union’s members. We’ll get your savings back to you within seven days and you won’t even need to lift a finger. Up to £85,000 of your money is safe, so there is no reason to worry. You will have your savings back soon.”
FSCS has a record of responding quickly to credit union failures. It pays the vast majority of claims well within its seven day target and complicated claims within 20 days. It uses credit union records to pay people back their money. For example, last month when Cornwall and Isles of Scilly Credit Union failed, FSCS paid out just over £569,000 in compensation to its some 2000 members within seven days.
The financial services industry funds FSCS. It was set up by government and is free to consumers.
For more information please visit our Severn Four Credit Union Q&As