Street Cred customers will be paid out before Christmas

Date published: 18/10/2007

Street Cred customers in Rochdale will be paid out well before Christmas.  The Financial Services Compensation Scheme, part of the Department of Work and Pensions has confirmed that they will be writing to customers next week with a form to get claim back their savings.

Rochdale Metropolitan Borough Council has set up a help line for anyone who is concerned.  Council Leader Alan Taylor said: "Although it is not our responsibility to sort this out, we are concerned for the residents of our Borough.  Anyone who has lost out can call the Council on 0845 1212974.

"I must congratulate Council Officers who have worked hard to sort this situation out.  As soon as it became clear that there was a problem they set to work ensuring that we had much needed answers.  Through Paul Rowen's position on our National Work and Pension's Team (not linked to the FSCS), we were also able to get clear answers and make sure that any claims will be dealt with as soon as possible."

Paul Rowen MP said: "I know that this has been a major concern for the people of Rochdale.  I've had former Farepak customers amongst others contact me complaining - this must be their worst nightmare. 

"The Financial Services Compensation Scheme have assured me that once they have received the claim form, they will pay out within four weeks – usually much quicker.  They have also assured me that they will take on extra staff to ensure that any complaints are dealt with speedily.  This has been unfortunate for those affected, but they have my assurance that we are doing everything possible."

Loretta Minghella, Chief Executive of the Financial Services Compensation Scheme (FSCS) said: "The FSCS is talking to the credit union and arranging to review its records, with a view to helping members who are owed money. FSCS is the UK's statutory compensation fund of last resort for customers of financial services firms. 

"More than 3,000 people are understood to be members of the credit union based in Rochdale, including children and those in receipt of state benefits. 

"The good news for Streetcred savers is that they are protected by FSCS.  We are working with the credit union to help its customers as quickly as possible. We will be giving priority to people who are suffering financial hardship."

Jonathan Clark, Director of Claims added: "FSCS is used to processing claims quickly and efficiently. Although every case is different, in October last year, we declared the credit union St Columba’s in default and commenced paying claims in just ten days after the default was declared. All claims received against  St Columba’s were processed ahead of Christmas. The Scheme will aim for similar results for members of the  Streetcred Credit Union." 

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.

FSCS will be sending application forms to Streetcred members to enable them to claim compensation from the Scheme.

• www.fscs.org.uk/consumer/How_to_Claim/Deposits/