Sunday 25 June 2017

Bust Rush Credit Union complaint to regulator

Rush Credit Union.
Rush Credit Union.

Charlie Weston Personal Finance Editor

PEOPLE paying off loans to bust Rush Credit Union have complained to the Central Bank over what they claim are threats from the lender's liquidators.

The former members claim they were threatened with poor credit ratings unless they signed up to make repayments through a standing order.

McStay Luby, liquidator of the now-closed credit union, said it was investigating the claims, but denied threats to report people to the Irish Credit Bureau (ICB) for not setting up standing orders.

The High Court appointed McStay Luby as liquidators to Rush Credit Union in November following an application by the Central Bank on foot of a probe that had revealed fraud and a funds shortfall.

One member said he was called by a person working for the liquidator asking him to switch from making payments in person at the offices of the former credit union to setting up a standing order instead.

"I explained I did not wish to set up a standing order but am very happy to continue to make payments locally where possible as I work 9 to 5, at which point he told he me I was going to have a bad credit rating."

The member, who did not want to be named, has a loan for €6,500. He did not understand why he got the call as he has paid €2,000 in advance on the borrowings.

The man says he was told he had no choice but to sign a standing order to pay off the debt, and if he did not it would be flagged on the former credit union's system and reported to the Irish Credit Bureau.

He posted comments on Askaboutmoney.com and was subsequently spoken to by the Irish Independent.

"He told me he would update the system to say 'I would pay when it suited me'. I argued this is not what I said but he only heard what he wanted.

"He didn't care when I mentioned my loan was in credit, so how could I be behind payments? I asked about a possible settlement and he would not even talk about this."

Jim Luby of liquidators McStay Luby said his firm was dealing with the complaint.

"There is no basis for the comment that not setting up a standing order would result in a credit-rating issue," Mr Luby added. "Obviously, if a borrower defaults, credit rating may be affected."

There is close to €9m owed on 1,600 outstanding loans.

The Central Bank said: "The liquidation of Rush Credit Union does not imply any change in members' repayment obligations, for example, a faster repayment schedule cannot be imposed."

The regulator said payments should continue to the term as set out in the existing terms and conditions.

Rush Credit Union was placed into liquidation by the Central Bank and the High Court following the emergence of a €4.7m hole in its reserves, and allegations of financial mismanagement emerged.

Gardai are expected to press charges in relation to the allegation of fraud at the credit union.

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