Credit unions calling in debt collectors
CREDIT unions are hiring debt collectors to recoup outstanding loans as people "fail to engage" with staff about their financial problems.
The Irish League of Credit Unions (ILCU) last night confirmed that a growing number of their institutions were employing debt management companies to collect monies owed.
A busy city centre credit union was the latest branch to take steps to hire a solicitor and debt collector as it attempted to recoup €2.8m borrowed by members who are now unable to pay it back.
St Dominic's Credit Union in Waterford is going down this route as some members are failing to keep up with loan payments.
Many members who borrowed thousands of euro for car loans, home repairs and holidays recently lost their jobs and are struggling to make ends meet.
A statement from the ILCU said credit unions were "obliged to take all necessary steps to recoup any amounts outstanding".
"Credit unions encourage members who are having difficulty in repaying loans to contact the credit union at the earliest possible stage. The credit union will endeavour to work with the member to find an acceptable solution, be it by assisting with budgeting or rescheduling payments where possible," the statement added.
However, it said in instances where members did not engage with the credit union, "some credit unions may employ the services of a debt management company to recoup any amounts outstanding".
It added: "This is generally viewed as a final step if the credit union has been frustrated in its efforts to engage with the member and recoup amounts outstanding."
St Dominic's Credit Union informed members at its AGM last week it would chase the €2.8m it was owed.