The 498-member Basildon Credit Union Limited (FRN: 213229) has gone into administration and been declared in default by the Financial Services Compensation Scheme (FSCS).
The FSCS has now stepped in to ensure members of the credit union get their money returned.
It said it was expecting total compensation for the 498 members of the Essex-based credit union to cost it around £344,000.
The FSCS said it would compensate most of the 498 members by cheque within seven working days.
Where contact details are missing for members who still have money in their Basildon Credit Union Limited account, FSCS said it will not be able to issue cheques to these members immediately.
The Basildon Credit Union was a financial co-operative owned by its members.
Credit unions provide banking, loan and saving services, often to those at lower income levels with limited access to High Street banks.
In January the 18,000-member London Community Credit Union went into default sparking claims of around £15.4m.
According to Bank of England statistics, UK credit unions had total liquid assets of £1.242bn in 2023 with loans to members of £2.338bn.
Anyone who believes they still have money in an account with the Basildon Credit Union but has not received a compensation cheque from FSCS by 26 March should contact the Joint Administrators, Dina Devalia and Michael Kiely at Quantuma Advisory Limited, 7th Floor, 20 St Andrew Street, London, EC4A 3AG.
Emma Barrow, Head of Communications at FSCS said: “Customers of Basildon Credit Union Limited can be assured that their money is safe.
“FSCS has now stepped in and members with live accounts don’t need to do anything – they will receive their money automatically by cheque within a few days.”
Only people who lived and/or worked within the County of Essex could qualify for the Basildon Credit Union.
It had opened for business in 1988 when it began as a workplace Credit Union for Basildon Borough Council employees. It later widened its Common Bond to include former employees of the Council, before widening membership to Essex residents and workers.
According to the FCA Register it became authorised in August 2002.
According to the credit union’s website, it was supported by six volunteer directors and two part-time, paid finance officers.
