Lender in default abandons over 800 clients

Lender in default abandons over 800 clients




Default Redcar-based lender, Redcar & Cleveland Money Tree & Glen Credit Union, was wound up last Friday, leaving over 800 clients.

 Default Redcar-based lender, Redcar & Cleveland Money Tree & Glen Credit Union, was wound up last Friday, leaving over 800 clients . 

The Financial Services Compensation Scheme (FSCS) has now stepped in to protect these clients. 

Payments have now been made to more than 800 of the credit union’s members, where the Financial Services Compensation Scheme (FSCS) said that the payments were sent days after the lender was wound up.

On the lender’s site, it stated ‘with great sadness and regret’ that “the Credit Union is closed and no longer able to accept deposits or allow members or juvenile depositors to withdraw any shares or money held in the Credit Union. Therefore you will not be able to access funds held within your account.”

It assured members that it had done everything possible to avoid this outcome. 

Those with outstanding loans to the lender have been informed by the scheme that the agreement still remains in place and repayments must be maintained. The payments will now be managed by the liquidator. 

The records of the union showed that over 800 members were due compensations for deposits they held, where it is was found that deposits held by the lender for some 800 savers totalled at £200,000.

The FSCS stated that members will receive cheques in the post, however those who had less than £1,000 will receive a letter where they can gain cash from their Post Office.

Commenting on the development, Mark Oakes, Head of Communications, at the scheme said: "FSCS protects people when authorised financial services firms go bust. So I'm pleased to confirm FSCS payments have now been made to members of the Redcar & Cleveland Credit Union. It is good news for those members."

The FSCS protects savings up to £85,000 and have protected more than 4.5 million people since 2001, and paid more than £26 billion for deposits.  

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