In the ombudsman’s recently published decisions there were two cases of particular interest to credit unions.
- Decision Reference 2020-0220 – Appropriate safeguards on a junior account; and
- Decision Reference 2020-0266 – Reduction in Life Savings Cover applicable to members savings
Safeguards on a junior account
The Ombudsman upheld the complaint and directed the bank to reimburse the account with all of the withdrawals which were permitted contrary to the mandate. Credit Unions should be clear and should ensure that parents and guardians are also clear that the funds in the account of a minor are for the sole use of the minor and cannot be accessed by a third part. Mandates on these accounts should be very carefully applied
Check out Michelle’s article for more information: https://www.rbk.ie/news/childrens-accounts-credit-unions-how-to-avoid-an-expensive-claim
Reduction in Life Savings cover
Many credit unions have already reduced life savings cover to reduce the costs of free benefits. While it was never in doubt that a credit union had the authority to do this it is comforting to know that there is a legally binding decision around this. Key points to note for credit unions making these changes are:
- Clear communication with members in accordance with consumer protection best practice
- Review of all documentation to ensure that members are fully aware of the terms and conditions which apply and also that changes can be made by the board at any time
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In the ombudsman’s recently published decisions there were two cases of particular interest to credit unions.
- Decision Reference 2020-0220 – Appropriate safeguards on a junior account; and
- Decision Reference 2020-0266 – Reduction in Life Savings Cover applicable to members savings
Safeguards on a junior account
The Ombudsman upheld the complaint and directed the bank to reimburse the account with all of the withdrawals which were permitted contrary to the mandate. Credit Unions should be clear and should ensure that parents and guardians are also clear that the funds in the account of a minor are for the sole use of the minor and cannot be accessed by a third party. Mandates on these accounts should be very carefully applied
Check out Michelle’s article for more information: https://www.rbk.ie/news/childrens-accounts-credit-unions-how-to-avoid-an-expensive-claim
Reduction in Life Savings cover
Many credit unions have already reduced life savings cover to reduce the costs of free benefits. While it was never in doubt that a credit union had the authority to do this it is comforting to know that there is a legally binding decision around this. Key points to note for credit unions making these changes are:
- Clear communication with members in accordance with consumer protection best practice
- Review of all documentation to ensure that members are fully aware of the terms and conditions which apply and also that changes can be made by the board at any time
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Michelle’s Links:
RBK: https://www.rbk.ie
Michelle’s Links:
RBK: https://www.rbk.ie
