Parkhead Credit Union has closed, with members assured their savings should be protected
Savers have been reassured that their money will be safe after a credit union fell into administration.
Parkhead Credit Union advised its members this week that it has ceased trading and is now in default.
However, it is reassuring customers their money is safe as the Financial Services Compensation Scheme (FSCS) has stepped in to protect members.
FSCS will compensate within seven days the vast majority of the credit union’s 2,523 members. Using Parkhead Credit Union’s records, FSCS will send payments out automatically.
Members with up to £1,000 in their account will receive a letter to get cash over the counter at their local Post Office. Anyone with a balance of more than £1,000 will receive a cheque for their balance direct from FSCS.
FSCS protects up to £85,000 of savings – double that for joint accounts – and has come to the aid of more than 4.5m people since 2001, while paying out over £26bn in compensation. FSCS expects the total pay-out to be over £1.68m.
Alex Kuczynski, chief corporate affairs officer at FSCS, said: “FSCS is protecting the members of Parkhead Credit Union Ltd and helping them to get back on track. Our aim is for the vast majority of Parkhead’s customers to get their money back within seven days.
“Everyone needs to know their money is safe and we have just increased our limits for the wide range of products and services that we cover.
“As well as for claims against a credit union, bank or building society, customers can now be assured that if they lose money as a result of the failure of an authorised financial services firm such as their investment or mortgage adviser, or debt management provider, that FSCS provides a higher level of protection up to £85,000 per person.”
Local MSP John Mason said: “Although we have been aware of its ongoing struggles for some time, I am very disappointed to hear that Parkhead Credit Union has stopped trading.
“I am, however, glad to hear that all members should have their savings automatically returned to them within seven days.
“Credit unions are generally very well run and highly regulated, and I continue to believe that they should be a major player in the financial sector, allowing local opportunities for savings and affordable loans.”
Queries about Parkhead Credit Union can be directed to Dina Devalia and James Sleight of PKF Geoffrey Martin & Co., who have been appointed as joint administrators.
The administrators can be contacted by telephone in the first instance on 0141 551 8387 or 0141 432 1703, or alternatively on 0113 244 5141.