Advertisement

  1. ITV Report

Savers to be 'paid back in full' after multi-million pound credit union collapses

The North Yorkshire Credit Union has gone into liquidation Photo: NYCU

The 5,000 customers of the collapsed North Yorkshire Credit Union have been told that their investments are safe.

The savers have nearly £2 million invested in the union, which was placed into liquidation following a High Court Order.

The not-for-profit financial co-operative, which had its offices on Holgate Road in York, was initially formed in 2006.

It was open to anyone who lives, studies or volunteers on a regular basis in York or in the county of North Yorkshire.

Kevin Murphy, from Chantrey Vellacott DFK, says all savers will be compensated in full.

“Every member of the North Yorkshire Credit Union will get their money back in full within the next week, as they are protected by the Financial Services Compensation Scheme,” he said.

“The FSCS has confirmed this process is automatic, so members do not need to act to get their money back."

"People with less than £1,000 will receive a letter to get cash over the counter at the Post Office, while anyone with more than £1,000 will receive a cheque."

Mr Murphy went on to say that the collapse of North Yorkshire Credit Union is due to a combination of factors.

"This includes bad debt provisions in respect to loans to members of over £400,000 due to inadequate credit referencing and credit control, and also inadequate cost control, which is partly due to the resources required to service the large North Yorkshire region."

The former Chair of the board of directors at the North Yorkshire Credit Union has told ITV News that mistakes were made:

But there is hope for some of the thousands affected by the collapse.

As well as getting their money back, the South Yorkshire Credit Union (SYCU) has shown interest in opening branches in York and Scarborough and plans to visit the areas next week.

It is thought around 2000 people are members of the union in York and 1200 in Scarborough.

The SYCU is asking North Yorkshire County Council for a one-off grant to help set up the branches - a request that will be discussed at a council meeting next week.

Cllr Carl Les, the Deputy Leader of the County Council will be at the meeting.