Monday 24 July 2017

Credit union has €200,000 missing from accounts

Credit union regulator Anne Marie McKiernan
Credit union regulator Anne Marie McKiernan
Charlie Weston

Charlie Weston

Gardai have been called into another credit union hit by suspected fraud, with accounts believed to have been raided by a staff member, the Irish Independent has learned.

Gurranabraher Credit Union in Cork is understood to have lost €200,000 and will now have to make an insurance claim to refund members.

It comes after similar suspected crimes at credit unions in Rush, Dublin, and Fermoy, Cork.

In a statement, the chief executive of Gurranabraher, Philip Hosford, confirmed that a staff member had been dismissed and a "matter" was reported to gardaí.

"Gurranabraher Credit Union Ltd confirms that a matter arose internally. This matter was identified and investigated by Gurranabraher Credit Union, and as a result of the investigation a staff member has been dismissed," it said.

"The matter has now been referred by Gurranabraher Credit Union to An Garda Síochána, and the Central Bank has been informed."

Mr Hosford said the credit union, which is based outside Cork city, is insured to cover the loss.

Asked how many member accounts were affected, Mr Hosford said: "Gurranabraher Credit Union confirms that no member is exposed to a loss as a result of this matter, and that the matter identified has no impact on the provision of services provided by the credit union."

The CEO said his credit union is financially strong and stable, with over €96m in assets.

It operates in the mainly working-class areas of Gurranabraher, Sunday's Well, Knocknaheeny, Hollyhill and Shanakiel and has 15,000 members.

The investigation into the raid is understood to be at an early stage. Officials at the lender are likely to have to engage forensic accountants to conduct a full trawl of all accounts.

Last week, Synergy Credit Union in Fermoy called in gardaí when a staff member was suspected of taking members' money.

The fraud was estimated at €400,000, but another €160,000 is to be spent on a full probe into the missing money. Synergy Credit Union insisted all the money taken from members' accounts has been returned.

These two cases come months after Rush Credit Union, in Co Dublin, was shut down after a series of fraudulent activities were discovered.

Some €1.3m has been set aside to cover the cost of that fraud at the now closed credit union. The Central Bank told the High Court car draws at Rush were rigged. Some €450,000 has had to be returned to members, many of whom were entered into a draw without giving their consent.

The regulator for credit unions, Anne Marie McKiernan, last month warned that standards of regulatory compliance were too low.

Asked about the spate of suspected frauds, a spokeswoman for the Irish League of Credit Unions said incidents of this nature remain very isolated.

She said that as credit unions are democratic and fully accountable to their members, where such incidents occur it often comes to public attention.

"This is distinctly different to other financial institutions where such incidents may be dealt with via a closed internal process," she added.

Irish Independent

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