Credit union covering Sandwell borough is declared in default

The Financial Services Compensation Scheme has stepped in to protect the 7,416 members of 6 Towns Credit Union, which is in default.

FSCS will compensate the 7,416 members, most of whom will receive payment within seven days.

Using the West Bromwich-based credit union’s records FSCS will send members with balances below £250 a letter to allow them to get cash at any Post Office branch, while members with balances over £250 will receive a cheque automatically.

FSCS expects the total compensation for 6 Towns Credit Union to be around £1.04 million.

Where contact details are missing for members who still have money in their 6 Towns Credit Union account FSCS will not be able to issue cheques to these members immediately.

Anyone who believes they still have money in an account with the credit union but has not received a compensation cheque from FSCS within seven days should contact the joint administrators, James Sleight and Peter Hart of PKF Geoffrey Martin & Co, Leeds.

Lila Pleban, chief communications officer at FSCS, said: “We want to reassure any remaining members of 6 Towns Credit Union Limited that their money is safe. Most members who have not already closed their accounts will receive their money by cheque directly from us within a few days.

FSCS protects people’s savings up to £85,000 and we are ready to help members who have been affected get back on track as soon as possible. If you have not received compensation for your remaining balance within the next seven days please get in touch with the joint administrators.”

A dedicated page on the FSCS website includes questions and answers which may be useful for members of 6 Towns Credit Union.

The credit union is based at Greets Green Community Enterprise in Wood Lane and has additional drop-in locations for limited hours at Glebefields Library, St Mark’s Road, Glebefields Estate, Tipton, and Wednesbury Community Hub, Union Street.

The not-for-profit financial organisation also operated in Worcestershire and South Birmingham.

The ‘6 Towns’ name is derived from the six towns that comprise the borough – Wednesbury, Tipton, West Bromwich, Smethwick, Oldbury and Rowley Regis.

The range of services available included savings and loan facilities and the provision of a current account. Other services include a landlords facility to ensure that tenants’ rent payments are made on time which serves to protect tenancies.

6 Towns started operation in October 2005.