West-Midlands credit union 6 Towns Credit Union Limited has been declared in default by the Financial Services Compensation Scheme.

The FSCS expects to pay around £1.04m in compensation to 7,416 members of the credit union.

Most will receive payment within seven days.

The FSCS will use the credit union’s records to send members with balances over £250 a cheque in the post.

Members with balances below £250 will receive a letter to allow them to receive their cash via any Post Office branch.

Members who believe they have an account with the credit union but have not received a compensation cheque within seven days should contact joint administrators James Sleight and Peter Hart, at PKF Geoffrey Martin & Co Limited, 3rd Floor, One Park Row, Leeds, LS1 5HN.

Members with loans with the credit union need to continue to make their contractual repayments until they are fully paid off. They should cancel and direct debits and standing orders and contact the joint administrators above.

6 Towns Credit Union ceased trading on 4 September and was placed into administration yesterday. The credit union was based in West Bromwich.

FSCS protection covers money held in banks, building societies and credit union accounts. The FSCS also protects insurance, investments, mortgage advice and arranging, debt management and funeral plans.