The Financial Services Compensation Scheme (FSCS) is the UK's statutory fund of last resort for customers of authorised financial services firms.More

Financial ombudsman Services (FOS) the independent service for settling disputes between businesses providing financial services and their customers More

Important information about compensation arrangements

We are covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to depositors if a credit union is unable to meet its financial obligations. Most depositors - including most individuals and small businesses - are covered by the scheme.

In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the credit union, including their share of any joint account, and not to each separate account.

For further information about the scheme (including the amounts covered and eligibility to claim) please ask at your local branch, refer to the FSCS website http://www.fscs.org.uk/ or call 0800 678 1100.

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You could download the following PDF files:

Our terms of business

Terms and conditions for Credit Union Current Account (CUCA)

Terms and conditions for London Mutual Credit Union Loans

About our Insurance Services - Status Disclosure

Terms and conditions for Online Services

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Distance Marketing Directive Policy (DMD)

Definition of a distance contract

Article 2 of the Directive defines ‘distance contract’ as:

“Any contract concerning financial services concluded between a supplier and a consumer under an organized distance sales or service provision scheme run by the supplier, who, for the purpose of that contract, makes exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded.”

and “means of distance communication” as:

“any means which, without the simultaneous physical presence of the supplier and the consumer, may be used for the distance marketing of a service between those parties.”

What this means for credit unions is that both account opening and loan agreements that are concluded using distance communication only, i.e. with no face to face contact will be effected by the DMD. The most common forms of distance communication are, telephone, internet, email or post. However if there is any interface with a human e.g. returning a form to a collector, the transaction is no longer at a distance.

Implementing the DMD

There are two main elements involved in implementing the distance-marketing directive, which applies to both account opening and loan agreements.

1. Disclosure of Information (CRED 11.4.4 G)

Content
Name, address and status of credit union (i.e. that it is that the credit union is authorized and regulated by the FSA)

Key features/characteristics of the service on offer, and in the case of loan agreements the total price to be paid by the member
Cancellation rights (14 days in both cases)
Compensation rights
Complaints procedures

Form and timing
- In a durable medium
- In good time (i.e. enough time for a person to consider the service on offer)
- Before the applicant is bound by the terms of membership, or the loan

Credit unions affected, should arrange for pre-printed literature containing this information to be available, and for staff and volunteers to be trained as to when in the process it should be given to the potential member. You should also establish both a policy and procedure for distance account opening and distance loan agreements.


2 Cancellation Rights CRED (11.4.7 G)

Under the DMD the member will have the right to cancel their membership with the credit union, or their loan agreement without penalty within 14 days of the day of the conclusion of the contract, or from when they received the contractual terms and conditions. You should make it clear to your members how they go about canceling any agreements concluded at a distance. This should normally be done in writing, and should be stated within your policy and procedure for distance transactions.

However if a member needed to borrow within 14 days, this would be deemed to be an acceptance of membership. The credit union will not charge interest accrued on the loan before the member cancels.

It is the normal practices that the new members pay £5 when they apply to join the credit union. If they then decided to take up the DMD option and cancel their membership, the credit union will refund £3 only as £2 will be payable as an administration fee.

If a member does decide to exercise their cancellation rights, the credit union must return, no later than 30 days after the date, any money paid to the credit union.

The credit union reserve rights to request that the members pay for any services provided up to the date of cancellation provided it does not amount to a penalty.

Exemptions

1) The DMD will only apply where there is ‘an organized distance sales or service-provision scheme run by the supplier’. Therefore the DMD will only apply where the credit union has set up facilities to enable members to deal with the credit union at a distance. If the credit union normally operates purely on a face to face basis then the rules will not apply. A one-off transaction dealt with at a distance will not be required to comply with the rules. (CRED 11.4.1 G).

2) Where the member is recruited by telephone they can give you consent to receive a more limited range of information before the conclusion of the contract. However full information, in a durable medium must be provided immediately after the conclusion of the distance contract.


Workplace Contacts

If an employer simply makes information and application packs available to employees, any resulting contract would be a distance one and would have to meet the DMD requirements regarding disclosure and cancellation. However, if for example a work place rep met face to face with potential members to talk about credit union membership, or terms and conditions of loans this would not constitute a distance contract.

Joint Accounts

Where there is a joint account and only one of the members is physically present at the time of opening the account, this does not constitute a distance contract, as it is not entered into exclusively by distance means.

Our Obligation

London Mutual Credit Union will ensure that Distance Marketing Leaflet is included with the welcome letter, which we sent to all new members when they join.

For new members, a one off Membership Fee of £2 will be deducted from their share account towards administration charges prior to the refund.

If a member does decide to exercise their cancellation rights, the credit union must return, no later than 30 days after the date, any money paid to the credit union. This could include their joining fee.

The credit union reserve rights to request that the members pay for any services provided up to the date of cancellation provided it does not amount to a penalty.

The credit union will not charge interest accrued on the loan before the member cancels.

 

 

 

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We pride ourselves on our high quality products and customer service and take your concerns very seriously.

However, there may be times when you feel that our service has fallen below the standard you expect. If this is the case, and you wish to make a complaint, we will do our best to try and resolve the issue.

If you have a complaint please refer your complaint to the original point of contact.

If the matter can not be resolved to your satisfaction by the staff, please contact the Manager.

It is our policy to resolve any complaints as quickly as possible.

You may wish to complete the appropriate complaints form for the attention of the Manager.

Your complaint will be acknowledged within 24 hours.

If the Manager needs more time to collect information you will receive a letter within 5 working days of your acknowledgment detailing the steps being taken and the expected date of completion.

The Manager will give a full response within 14 working days.

If the member is not satisfied with the Manager’s response they should request their complaint be investigated by the Secretary of the Board of Directors.

The Secretary will acknowledge within 5 working days and a date will be given when the Board will consider the complaint and expected date of a full response will be given.

If the member is unsatisfied with the Board of Director’s response they can request that the Supervisory Committee consider the complaint and the Committee will meet the Secretary of the Board and agree a final response within 14 working days.

What can you do if you are not satisfied with our final response?

If you are not satisfied with our final response, you may be entitled to refer the matter to the Financial Ombudsman Service (FOS):

South Quay Plaza, 183 Marsh Wall, London, E14 9SR
Tel: 0845 080 1800. www.financial – ombudsman.org.uk

How long do you have to make such a referal?

You have six months from the date of our final response letter to make such a referral. This procedure is described in more detail in the Financial Ombudsman Services leaflet “Your Complaint and the Ombudsman”. This explains the service they offer and how you may proceed.

How will the Financial Ombudsman Service help you?

If your complaint is eligible for further investigation, the FOS will listen to what you say and will listen to what we say and look at all the facts. If they think we have treated you fairly, they will tell you why. If they don't think we have treated you fairly, they can make us put things right for you.

Will my complaint be eligible for investigation by the Financial Ombudsman Service?

Whilst the majority of complaints are eligible for further investigation by the FOS, it is important that you are aware this does not apply in every instance. If you are in any doubt about whether your complaint is eligible for further investigation you should contact the FOS direct to clarify this. Details of the types of complaints the FOS will not consider are given on their website. www.financial-ombudsman.org.uk

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