CREDIT UNIONS Help...? payments deducted from benefits..!

hotchick

Clockwise credit union in leicester can have repayments deducted directly from your benefits if you fall behind with repayments. Does anyone know how, because even a county court won't deduct payments from your benefits. With many peoples circumstances changing is this fair as going from working to benefits may be through no fault of your own.

iolanthe07

Seems a good idea to me. Credit Unions rely on people paying back promptly and in full to keep their rates low and taking payments direct from benefits will facilitate this to the benefit of everyone.

rsykes2000

I completely agree. Credit Unions are the for the use, benefit and most importantly protection of their members, who can be at the 'lower-end' of the pay scales - their money has to be protected.

Tixy

I'm really suprised they can do this - benefit payments are only sufficent to cover a basic standard of living (not that I don't agree that credit unions should be paid back high priority).

Hotchick -out of interest where have you seen it written that arrears can be deducted from benefits?

hotchick

It actually states it in the agreement, I agree credit unions need to be paid back on time, my main concern is who decides the amount to be deducted surely this could put vunerable people in a difficult position. is it right a single parent is unable to have heating because the CU have deducted payments....

Jamesf81

Well if you agree or have agreed to take out the loan you are agreeing or have agreed to their terms and conditions so dont see what problem you have.

If are worried that you are going to fall behind with payments then why are you even taking out a loan?

orc_2

I had not heard of this before, but can understand the reasoning behind it.

As a help, have a look at this link, to the parent body for CUs.

http://www.abcul.org/page/aboutsite.cfm

Perhaps you could ask them for their advice.

Note that CUs are subject to FSA regulation and that might be an avenue to explore.

jonesMUFCforever

hotchick wrote: »

It actually states it in the agreement, I agree credit unions need to be paid back on time, my main concern is who decides the amount to be deducted surely this could put vunerable people in a difficult position. is it right a single parent is unable to have heating because the CU have deducted payments....

In that case I would respectfully suggest that you cannot afford to borrow.
Unlike banks with billions of pounds on their balance sheets credit unions are very small normally restricted to local people who also have the right for their money to be protected.
If you don't like the rules don't borrow - go somewhere else!

hotchick

Thank you orc I have emailed the site you suggested aswell as the CU to see their reply.

Jamesf81

They will tell you the same.

If it is in an agreement and you have signed it then it is a legal document

orc_2

Jamesf81 wrote: »

They will tell you the same.

If it is in an agreement and you have signed it then it is a legal document

That may well be the case and you may well be correct. However, there is no harm in asking or challenging it. If you read my post you will see that I referred to the fact that they are subject to regulation firstly through the parent or trade body and secondly through the FSA.

I for one do not believe that anyone should just accept a condition and not challenge it. Many contracts have been successfully challenged and found to be worthless- PPI for example. More power to consumers is what I advocate.

As CU's were set up for people with a common interest, very often those on lower household income and disposable income, it will be interesting to hear what the parent body, abcul, says about the agreement as regards loan repayments being taken from benefits.

I am not saying that the CU are wrong or right, merely giving an option to explore the issue and get further information to satisfy the OP's interest.:D