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HALF of Cara Credit Union’s membership are due to receive a refund on the contributions they paid to Cara Credit Union’s Death Benefit Insurance (“DBI”) scheme.
Nearly 22,000 members have been notified this week that they will receive a refund (on average €36), depending on the number of years they have been a member and the amount they contributed to the insurance scheme from their share dividend down through the years.
Cara Credit Union has offered its members DBI since 1996, which is designed to lighten the financial burden of bereavement for credit union members, and which currently amounts to €1,950 per member on their death (subject to terms & conditions).
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In 2007, the Payments Services Directive indicated that consent was required to execute a payment transaction i.e. members written consent.
While Cara Credit Union had obtained this written consent from all new members joining since July 2005 on its membership application form, it did not obtain written consent from existing members prior to that date.
In light of this, members who joined prior to July 2005 and members from Killorglin Credit Union and Tralee CIE Credit Union who completed mergers, are now eligible for a refund on the contributions they paid towards DBI.
Pa Laide, CEO, Cara Credit Union said; “we highlighted the DBI refund to our members in our newsletter accompanying their statements last November and at our last AGM.
“We had planned to do the refund in March but due to Covid 19 we had to delay this refund until now. It is important to note that Cara Credit Union has done nothing wrong.
“We acted in good faith, by continuing to pass a motion every year at our AGM, for the deduction of a contribution towards the DBI from a member’s dividend, up to a maximum of €4.50.
“We could have asked members for retrospective consent, but in the interest of fairness and transparency, and to fully comply with regulations, the Board of Cara Credit Union has decided to refund the DBI premiums, by lodging the refund amount directly to members’ accounts.”
“This year and going forward, DBI is now free to all our members [subject to meeting criteria], the cost of which will be absorbed by the credit union. This decision will be reviewed annually by our Board, as well as decisions relating to all our services, during regular reviews of our strategic plan. Where members now can help us is by borrowing with us. Lending is our main source of income that allows the credit union to fund our insurance services not just DBI but Life Savings Insurance and Loan Protection Insurance as well. We would ask members and non-members who are eligible to join who need a loan, to talk to us, like you we are local, we are lending and need your support to continue to offer these beneficial services to you,” he concluded.
