FSCS pays compensation to Streetcred members after just 9 days

The Financial Services Compensation Scheme (FSCS) has made the first compensation payments to members of Streetcred Credit Union nine days after it closed its doors on 16 October.

FSCS has an excellent track record of dealing with credit union claims very quickly. It fast-tracked its approach to make sure consumers who were facing immediate financial hardship could be compensated quickly.

Loretta Minghella, FSCS Chief Executive commented: “FSCS has pulled out all the stops and has now started paying compensation to members of Streetcred. We have sent application forms for compensation to just over 3,000 members of the credit union and would encourage those who believe they have lost money to return the forms as soon as possible. Our Customer Services Team is standing by to help anyone who might need help filling in the form.”

“FSCS faced a challenge similar to this last year, when the Bradford credit union St Columba’s went out of business. Then we exceeded all expectations with the speed at which we managed to start paying claims and this time we have done it even more quickly. We are aiming to complete paying Streetcred members by Christmas.”

Any members of the credit union who have not yet received an application form from FSCS and believe they are owed money should contact the Scheme on 020 7892 7300.

FSCS was set up under the Financial Services and Markets Act 2000. It is the UK’s statutory compensation scheme for consumers who have claims against regulated firms that are unable to pay them (described by FSCS as being “in default”). Before FSCS can pay claims for compensation it must be satisfied that the firm (in this case Streetcred credit union) is unable to pay back money it owes to its customers.

There is a limit to the compensation FSCS can pay. Deposits with credit unions are protected by the Scheme up to 100% of the first £35,000.

The FSA recently increased the limit, which means that Streetcred customers are likely to be the first to benefit from the increase. For more information about the FSCS’s work, consumers can visit fscs.org.uk.