More credit union theft cases are set to be flushed out
There will be more cases of credit unions being hit by staff raiding member accounts, experts have warned.
The stark warning comes after a second credit union in a week has admitted it has dismissed a staff member and reported losses of member money to gardaí.
The spate of recent frauds and the fear of more cases promoted the Central Bank to commit to ramping up its monitoring of credit unions.
Gurranabraher Credit Union in Co Cork is understood to have lost €200,000 and will now have to make an insurance claim to refund members.
It comes after a similar suspected crime at Synergy Credit Union in Fermoy, Cork, and huge losses in Rush, Co Dublin.
Now credit union auditors fear that it will emerge that accounts of members have been raided in more credit unions.
They are also worried that it will emerge that false insurance claims have been made for members who have died, and are fictitiously listed as members in a bid generate a payout.
Credit unions have only recently started to carry out intensive internal audits, a move which is flushing out insider theft that has been going on for years in some cases.
The Irish League of Credit Unions, which represents the lenders, admitted credit unions have been strengthening their systems of internal control.
One senior credit union expert, who did not want to be named, said this meant there will be more uncovering of insider theft, something that is likely to have been going on for years.
"Internal auditors are finding historic cases of fraud, but they are only finding them now. There will be more," he said.
He explained that although credit unions have been required to have internal auditors and compliance officers since 2012, it was only now that the systems were up and running.
Credit union members who die also have their loans wiped out, with suspicions insider fraudsters are making loan insurance claims for people who were are not members of the credit union.
Last month the Central Bank-based regulator for credit unions Anne Marie McKiernan warned that standards of regulatory compliance were too low.
Ms McKiernan said: "Regrettably, standards of regulatory compliance are still well below those required to credibly safeguard members' funds and position credit unions to tackle business model development."