Each credit union is obliged to have a complaints officer to whom a complaint of this nature should be addressed. The credit union will claim that the letter was sent. This will be a difficult issue to resolve. Best of luck with it. Slim
CU set shares agains loan for terminally ill member, and now won't pay death benefits
- Thread starter Alwyn
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Each credit union is obliged to have a complaints officer to whom a complaint of this nature should be addressed. The credit union will claim that the letter was sent. This will be a difficult issue to resolve. Best of luck with it. Slim
Brendan Burgess
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Hi Slim
Based on Boomtobust's side of the story, I would question the motivation for the CU to set the shares against the loan.
Is this their overall policy? Time and again, we see reports of people struggling with their Credit Union loans trying to get the shares set off against the loan and being refused.
So I would ask the CU to explain why they did this.
I would seek evidence that they sent the letter, although it would be difficult for them to produce such evidence.
Brendan
Based on Boomtobust's side of the story, I would question the motivation for the CU to set the shares against the loan.
Is this their overall policy? Time and again, we see reports of people struggling with their Credit Union loans trying to get the shares set off against the loan and being refused.
So I would ask the CU to explain why they did this.
I would seek evidence that they sent the letter, although it would be difficult for them to produce such evidence.
Brendan
Sure, but I would also say that credit unions are very slow to take this option as evidenced in many other posts. There may have been a lack of communication in the process that we are not aware of. The whole timeline of communication needs to be looked at. Most credit unions, in my experience, act with great empathy for the member if they become aware that the member is seriously ill, and would try to ensure that all insurance is availed of. In your example, by the way, doubling of shares is usually capped so may not amount to €20,000 in that example. In my CU, it would be capped at €13,000 approx plus Death Benefit Insurance of €1,300.
This case went in front of the board of directors and they upheld the managers sentiments.
SIL has been given the option to contest their decision by bringing the case in front of the very same board of people, yet again.
We feel this is a pointless exercise and wonder is it possible to go to the Ombudsman as of now?
SIL has been given the option to contest their decision by bringing the case in front of the very same board of people, yet again.
We feel this is a pointless exercise and wonder is it possible to go to the Ombudsman as of now?
Brendan Burgess
Founder
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To complain to the Ombudsman, you have to have what is known as a "Final Response Letter".
If your sister has the option of going to them again, then you should ask again for them to do so but also ask for a Final Response Letter to follow the meeting.
Brendan
If your sister has the option of going to them again, then you should ask again for them to do so but also ask for a Final Response Letter to follow the meeting.
Brendan
An update on this very long running saga.
The CU have desided to make a payment on my BIL's death benefit policy.
We simply could not get the CU to issue us with a final response letter to bring our case to the Ombudsman. Everytme the response letter was requested the CU merely ant danced around the issue. When we threatened media intervention my SIL received a letter telling her there was a cheque available for her to collect; releasing the full repayment of her partners death benefit policy.
No mention of her partners loan or shares have been mentioned by the CU.
The CU have desided to make a payment on my BIL's death benefit policy.
We simply could not get the CU to issue us with a final response letter to bring our case to the Ombudsman. Everytme the response letter was requested the CU merely ant danced around the issue. When we threatened media intervention my SIL received a letter telling her there was a cheque available for her to collect; releasing the full repayment of her partners death benefit policy.
No mention of her partners loan or shares have been mentioned by the CU.
I am pleased for your sister-in-law that she has got something out of this. I guess what they have done is restore your BIL's account to 'qualifying' status, thereby entitling it to DBI. It does not address how the loan arrears/shares was handled. If you still feel she has a case, I would press them, in writing, to issue a final response letter. Tell them it is needed to advance the case with the Ombudsman. In tandem, write to the Irish League of Credit Unions, monitoring department and make your complaint to them. This may put some pressure on your SIL's CU to resolve the issue.
Brendan Burgess
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Hi Boomtobust
That is some progress.
You have succeeded in one out of the three claims, if I follow all this correctly.
If you do not get a Final Response Letter on the other claims, make a complaint to the Ombudsman anyway and point out the problem.
Brendan
That is some progress.
You have succeeded in one out of the three claims, if I follow all this correctly.
If you do not get a Final Response Letter on the other claims, make a complaint to the Ombudsman anyway and point out the problem.
Brendan
CU Manager
Registered User
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Seems like the credit union made a gesture of goodwill.
We only have one side of the story and I find that many such "stories" are embellished in favour of the complainant. In practice, many efforts will usually have been made on a delinquent account and, as a last resort, when no meaningful engagement is forthcoming from the borrower, a share to loan transfer will be done (but only after informing the member of the consequences of continued non engagement).
It never ceases to amaze me how people expect the best of both worlds (i.e. don't pay their way but expect all the benefits).
And it absolutely amazes me how some people think its ok to leave their deceased loved one without putting their affairs in order - I know, blame everyone else and complain to the ombudsman that the deceased didn't pay their way but shure the CU should have used their crystal ball to see what was going to happen
Brendan Burgess
Founder
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Agree. This often happens. And given that boomtobust is reporting his sister's story, this is quite possible.
However, we can judge only on the story told. But you are right to question it.
The problem with this is that I have often suggested to people in difficulty that they ask/insist that their shares are set off against the loan and in every single case, the CU has refused to do it. So they end up paying a very high interest rate on the net loan.
I found this story odd that the CU did it off their own bat, fairly early on in the story.
That is fairly specific. Either the CU has issued a final response letter or they have not. Had they issued this letter, presumably BoomtoBust would ask us our opinion on it. So I think it's fair to assume that B2B is not lying about this.
If the CU has acted correctly, why have they not issued the Final Response Letter?
Financial institutions know that if they resist complaints and mess the complainant around, many of them will just not persist. I suspect that is what the CU is doing in this case.
Here is the Law:
20.— (1) All money payable to a credit union by a member of it shall be recoverable summarily as a civil debt by the credit union from the member.
(2) A credit union shall have a lien on the shares, deposits, dividends and interest of any member for any debt due to the credit union from that member, and may set off any sum credited to the member on those shares, deposits, dividends and interest in or towards the payment of that debt.
Opinion:
The CU have the ability in law to set off shares against a loan balance.
The situation that appears to arise here is that all the CUs have 'savings and loan insurance' and it is one of the biggest costs in a Credit Union.
By taking the action, and the member died then his estate was deprived of the benefit of the loan being written off and by doing so has the Credit Union been improving is arrears position - pressure from Central Bank on figures?
The matter of Customer Protection Codes appears to arise as Credit Unions are not immune from being required to follow best practices.
Therefore if it was established that :
1. There was no notice of what was going to happen (reasonable notice)
2. There was a lack of fair procedures in that it was arbitrary and capricious;
3. That it is not a generally accepted practice of CUs
Then there is a good case here.
What is to be done:
You need a strong individual to represent you against the Credit Union.
I would not waste my time with the FSO - yet.
20.— (1) All money payable to a credit union by a member of it shall be recoverable summarily as a civil debt by the credit union from the member.
(2) A credit union shall have a lien on the shares, deposits, dividends and interest of any member for any debt due to the credit union from that member, and may set off any sum credited to the member on those shares, deposits, dividends and interest in or towards the payment of that debt.
Opinion:
The CU have the ability in law to set off shares against a loan balance.
The situation that appears to arise here is that all the CUs have 'savings and loan insurance' and it is one of the biggest costs in a Credit Union.
By taking the action, and the member died then his estate was deprived of the benefit of the loan being written off and by doing so has the Credit Union been improving is arrears position - pressure from Central Bank on figures?
The matter of Customer Protection Codes appears to arise as Credit Unions are not immune from being required to follow best practices.
Therefore if it was established that :
1. There was no notice of what was going to happen (reasonable notice)
2. There was a lack of fair procedures in that it was arbitrary and capricious;
3. That it is not a generally accepted practice of CUs
Then there is a good case here.
What is to be done:
You need a strong individual to represent you against the Credit Union.
I would not waste my time with the FSO - yet.
I know, blame everyone else and complain to the ombudsman that the deceased didn't pay their way but shure the CU should have used their crystal ball to see what was going to happen
The exact same situation was discussed recently, the case of the life insurance policy lapsing because the deceased had stopped paying it a couple of months before, (suicide was cause of death if I remember correctly) case taken to the ombudsman, reminders sent by insurance company and we had debates on whether they should be registered post or not, but ombudsman ruled the insurance company did nothing wrong.
I agree with your point that people should put their affairs in order, that would be the ideal.
CU Manager
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That all looks very comprehensive but I think its a little early to be doing in with a "strong individual". Now is the time for information gathering.
The key issue is how much correspondence was sent by the CU to the member regarding the share to loan transfer and what documentary evidence exists of the member (or member's partner) communicating the members situation with the CU - if its just verbal then its not going to work
I would have a view that the tactics of the Central Bank with regards to Credit Unions reminds me of what one CEO of AIB said about his staff - we are having a war of attrition with our staff. Substitute Credit Union for staff and Central Bank for AIB.
Are Credit Unions so focused now on avoiding Regulatory scrutiny that matter like this action simply would not have taken place the way our party here has said. There is the possibility that when we hear the other side that the actions may be justified,
However, I only have a gut feeling, but that this story is reasonably accurate.
When Credit Unions simply cannot work together to rescue even the Newbridge of this world it is a matter of concern.
Are Credit Unions so focused now on avoiding Regulatory scrutiny that matter like this action simply would not have taken place the way our party here has said. There is the possibility that when we hear the other side that the actions may be justified,
However, I only have a gut feeling, but that this story is reasonably accurate.
When Credit Unions simply cannot work together to rescue even the Newbridge of this world it is a matter of concern.
Hi,
Thank you all very much for the time given on this thread.
I can so far report that the Credit Union released the death benefit and also the loan protection has cleared off the existing debt.
The CU made the payment as a gesture..
The CU have still refused to reinstate the account.
We are still struggling to receive the final letter.
Thank you all very much for the time given on this thread.
I can so far report that the Credit Union released the death benefit and also the loan protection has cleared off the existing debt.
The CU made the payment as a gesture..
The CU have still refused to reinstate the account.
We are still struggling to receive the final letter.
CU Manager
Registered User
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- 108
Fixed your post ... I don't have both sides of this story but going on instinct I suspect that the CU knows they are on solid ground legally but there's no publicity like a row with a grieving widow (regardless of how unreasonable they might be)