Get in touch: send your photos, videos, news & views by texting YORK to 80360 or send an email»
North Yorkshire Credit Union collapses
THE 5,000 savers at the collapsed North Yorkshire Credit Union have been assured they will receive all their money back within days.
The Credit Union (NYCU), which was founded in York in 2006, informed customers yesterday that the company had collapsed but that investors would be sent their money within days.
One member, Dianne Read, 51, from York said: "The person on the phone told me that all they had been told was that they had gone into liquidation from today. They said my savings, which are more than £2000, were safe and that a cheque was being sent out tomorrow.
“But they said anyone with a loan would have to keep paying.
“You don’t know what's safe and what isn’t at the moment.”
NYCU was placed into liquidation following an order of the High Court on Wednesday, with Kevin Murphy and Richard Toone, from Chantrey Vellacott DFK, appointed as liquidators.
Mr Murphy said: “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 (FSCS),” 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.”
He said the collapse of NYCU was 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,” he said.
“Under the terms of appointment as liquidators we are in the process of reviewing all of NYCU's assets and winding up the organisation."
The not-for-profit financial co-operative, which had its offices on Holgate Road, was open to anyone who lives, studies or volunteers on a regular basis in York or in the county of North Yorkshire.
Janet Looker, who chaired the union, said it was “easy” for Mr Murphy to come in and make such comments, but said she accepted that the organisation's credit control had not been good enough.
However, she said the organisation had also been badly hit by people suffering bankruptcy and redundancy, whose loans had turned bad.
“I feel utterly devastated,” she said. “We have seen it coming over the past few months but we have worked so hard to try to avoid this happening.”