Hi, we've had a few issues with a local credit union recently.

Having gone over paperwork for a loan for a family member, it appears that the credit union refused to off-set savings to allow a defaulted debt to be paid off, and instead insisted on refinancing.

If the savings had been used to off-set, the debt outstanding would have been approx. £300 and could have been repaid easily in a couple of months, at the time. The person asked to do this (in writing). The credit union refused.

As it is, the person now cannot repay the repayments at all as they have only PIP as income, and now the credit union are claiming the debt is closer to £3000 AFTER taking off the savings. The credit union won't provide a breakdown of amount paid or any justification of why they felt making them take out thousands to cover what boils down to £300 is acceptable. Run by one person, so complaints are never upheld.

Family member is disabled and at the time they agreed to the refinancing, was not only unwell themselves, but also had family members quite unwell too.

Credit Union are very aware of this, but basically don't care and have said as much.

It just looks like the credit union took a massive advantage to make interest off him. While big banks may well do it, it feels nastier from a credit union who's customers are more likely to be vulnerable, and actually I'm not sure a big bank would insist a customer took out a loan of approx. £4000 to cover £300. I think they'd take the savings and go after the £300 separately, not allow refinancing beyond affordability and sense. No 'extra' funds were made available due to refinancing either, it was all to avoid taking even a penny out the savings.

Of course it would be nicer to keep savings intact, but if they couldn't afford the repayments, and wanted to decrease their debt, it seems ridiculous to make them pay so much more on top just to keep the money there. They now owe so much more, and are in a worse position.

This credit union have in the past also been known to move money around accounts to make new accounts to put part of their savings in for people without their knowledge and also take money out people's savings for use of their business. Only small amounts- an extra £10 going missing at Christmas out a income-related benefit, for example. Statements were never sent too. Also rather than add charges to a debt or incurred cost, they were taken directly out of savings.

The credit union have recently been told in court they are NOT allowed to refuse to off-set savings, in order to create a larger debt to sue for. Owner claimed ignorance about off-setting, despite approx. 20 years owning the business.

Is there anything we can do about this? Complaining to the credit union is useless. It feels like they took advantage and scammed him- I'm quite angry about it, angry at myself too for not seeing it at the time but with no statements, we had nothing to compare it to.

Also, how do we calculate interest on a refinanced loan? As there seems to be something amiss on the figures too.

Thanks

1st

Have you every piece of paperwork?

If not sar them