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2,000 Savers Promised Money is Safe after Credit Union Goes Bust

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Published by the Pirate FM News Team at 7:01am 18th February 2013. (Updated at 3:30pm 18th February 2013)

More than two thousand people in Cornwall are promised they will get their money back, after their credit union went bust.

Cornish Community Banking has gone into liquidation blaming bad debts.

An official compensation scheme will mean around £550,000 is automatically repaid to savers.

Kevin Murphy from Chantrey Vellacott DFK appointed liquidators said: "Every member of Cornwall and the Isles of Scilly Credit Union will get their money back in full, as they are protected by the Financial Services Compensation Scheme (FSCS)

"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.

"Members are advised that payments from their accounts will be stopped from the date of liquidation. Members are advised to notify the recipient of any payments and make alternative arrangements.

"If members have an outstanding loan with the credit union please continue to make your repayments using the usual method of payment."

For further information, members are asked to refer to the notice on the credit union's website.

The liquidators will be writing to all members shortly enclosing a statement showing the balances on members' savings accounts together with the balances on any loan accounts.

Andrew Harvey, from Par-based The Financial Advice Centre, said: "I think it's worrying that a credit union has had to take these steps that they've had to do. People should look and make sure, with credit unions, that they have got the appropriate levels of protection in play. It's important to take those steps involved, and it's also important I think, to diversify.

"People now are looking for higher returns than what bank accounts can offer per se. The problem with that are there are risk factors that are involved with that. So, it's really important to take appropriate financial advice, really and truthfully, before tying up any money, I would say."

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