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Sunday 4 December 2016

€30k credit union loan was given before any forms were filled out

Published 04/06/2016 | 02:30

Members of troubled Rush Credit Union have revealed questionable practices at the lender where deposit money has gone missing. Photo: PA
Members of troubled Rush Credit Union have revealed questionable practices at the lender where deposit money has gone missing. Photo: PA

Members of troubled Rush Credit Union have revealed questionable practices at the lender where deposit money has gone missing.

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One member, who is self-employed, was given a €30,000 loan within days of applying, but before he got a chance to fill out an application form.

No credit checks were made - and the member was not asked to submit business accounts to the credit union.

The loan money was put in the account of the wife of the man, and her long-standing account was closed without her knowledge.

The couple described the way the lender dealt with their loan and the savings account as "bizarre" and said they have been unable to get information on what happened.

The couple do not know why the loan was given out without proper checks, and why one account was closed with money transferred into the wife's account.

Forensic accountants sent in to probe Rush Credit Union have found there were fake loans issued in members' names without their knowledge, and two sets of deposit books - one official and one 'under the table'.

Some €700,000 is unaccounted for at the credit union, which also covers the town of Lusk. The suspected fraud has been reported to the gardaí.

Read more: Gardaí are called in over €700k missing from credit union

The credit union has 12,000 active members and around €10.5m in loans, according to a statement from its board.

It holds savings of around €25m.

The woman said her husband works for himself, explaining: "He was given a loan for €30,000 without giving them any accounts, and with no background checks. The loan was given before he got around to filling out the application form."

But in an unexplained twist, the loan money was put into the long-standing account of his wife, with her name taken off the account.

"They put his name on my account. My name was deleted off the account. I have had that account for years and I always remember the account number, as you always remember the number of your first account.

"I never gave permission for my name to be taken off the account."

The woman said she has failed, over the past three years, to get any satisfactory explanation for what happened despite sending a detailed outline of what transpired to the secretary of the credit union, its supervisory committee, its legal representative and other officials.

Other credit union members described similar unorthodox lending practices in Rush.

It emerged in the past few days that investigators have found evidence of fake loans and two sets of deposit books at the North County Dublin credit union.

Read more: Credit union's fake loans and two sets of books probed

The lender is now under investigation by the gardaí and forensic accountants appointed by the board, on the advice of the Central Bank.

And it is understood that there are no records of some deposits taken from members.

The disappearance of the deposit money and the existence of irregular loans have prompted the credit union to write to its members asking them to confirm their loan and savings balances.

One source familiar with the situation said: "There seems to have been two books recording the deposits, one official, and one 'under the counter'. The level of the deposits are not reconciled.

"Deposit money has disappeared, and that is what is concerning the Central Bank."

The controversy prompted the Central Bank to insist that member money is safe. Deposits are insured by a State deposit scheme, covering up to €100,000 per person.

Irish Independent

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