FSCS steps in as credit union is declared default

A West Bromwich-based credit union has fallen into default, leaving the Financial Services Compensation Scheme (FSCS) to compensate its members.

6 Towns Credit Union was placed into administration on September 5 with James Sleight and Peter Hart of PKF Geoffrey Martin & Co appointed as joint administrators.

The FSCS will compensate the 7,416 members with most set to receive payment within seven days. Those with balances below £250 will be sent a letter to allow them to get cash at any Post Office branch, while members with balances over £250 will receive a cheque automatically.

It expects the total compensation for 6 Towns Credit Union to be around £1.04m.

Where contact details are missing for members who still have money in their 6 Towns Credit Union account FSCS will not be able to issue cheques to these members immediately.

Lila Pleban, chief communications Officer at FSCS, said: “We want to reassure any remaining members of 6 Towns Credit Union Limited that their money is safe. Most members who have not already closed their accounts will receive their money by cheque directly from us within a few days. 

“FSCS protects people’s savings up to £85,000 and we are ready to help members who have been affected get back on track as soon as possible. If you have not received compensation for your remaining balance within the next seven days please get in touch with the Joint Administrators.”