Credit union savers are compensated quickly

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MOST of the savers belonging to a credit union which went bust have been compensated.

The Havant Area Savers Credit Union had 265 members who use the scheme to save a little money every month as well as take out small, low interest loans, without having to open a bank account.

But it fell into default earlier this month and there was not enough cash to pay out what savers had put in.

In its first test, the government’s new Financial Services Compensation Scheme stepped in and has compensated 93 per cent of the savers already.

Each of them have either been sent a cheque or a letter enabling them to collect their cash over the counter at a Post Office.

The FSCS’s chief executive Mark Neale said: ‘We are very pleased that we have been able to compensate members of Havant Area Savers Credit Union so quickly.

‘This was the first test of our ability to pay compensation in the majority of cases within seven days.

‘The fact that we have achieved this shows our commitment to providing compensation as quickly as possible to consumers who need our help. We would like to thank the credit union for its help to protect Havant members.’

The union had been going since 1996 but got into financial difficulties recently because not enough people were taking out loans to make income from the interest.

For more information go to fscs.org.uk