ILCU Savings Protection Scheme Advertising Lacking in Consumer Transparency?

Recently I thought it useful to enquire into the manner in which the ILCU SPS is being advertised by credit unions. In looking at credit union websites it was immediately apparent that differing messages were being used as follows:

"A savings protection scheme is in place to the benefit of the member up to € 12,700"

" Your savings are protected in your credit union under the Savings Protection Scheme of the Irish League of Credit Unions"

"All of the savings of Credit Union members are fully insured and secure. Dundrum Credit Union operates a Savings Protection Scheme which protects members’ shares."

"Your shares are safe and are protected by the Savings Protection Scheme, up to a limit of €10,000 operated by the Irish League of Credit Unions."

"Another great benefit of saving with the credit union is that your savings are protected by savings insurance.... The Credit Union participates in the Savings Protection Scheme established by the Irish League of Credit Unions. This protects savings, within certain limits. "

Savings up to a limit of €12,697 per member are protected by the Savings Protection Scheme in all credit unions participating in the Scheme.

and

"Savings up to a limit of €12,700 per member are guaranteed by the Savings Protection Scheme operated by ILCU." [ http://www.duleekcu.ie/shares.htm ]

"Your savings are guaranteed under the Savings Protection Scheme of the Irish League of Credit Unions." [ http://www.derrycu.com/content.asp?section=17 ]

I also noticed that statements differed depending on the site provider which
appears to indicate that content is being loaded “off the shelf”.

I resolved to write to credit unions querying the odd assemblage of statements. Some responded saying they would review their websites and some have since revised their sites. But some others took an altogether different tack – even declining to reply to a non-member. Fair enough – so I wrote back highlighting one of the most concise statements I came across, that of Sligo credit union:

http://www.sligocu.ie/savings.htm

"Your savings are protected by the Savings Protection Scheme which protects the individual savings of members by making sure that the credit unions are financially and administratively sound. Participation in the Savings Protection Scheme does not confer any legal right on a credit union to receive any financial assistance under the Scheme. Provided assistance is given under the Scheme the savings of individual credit union members may be protected up to a maximum of €12,700."

Cashel Credit Union's site is also most informative:
http://www.cashelcreditunion.ie/

“Cashel Credit Union is a member of the Savings Protection Scheme (SPS) of the Irish League of Credit Unions. This scheme confers no legal right upon a member credit union to receive financial assistance from the SPS. The scheme is designed to stabilise a credit union in the event that it (the Credit Union) gets into trading difficulties. If assistance is given to a credit union under the scheme, the savings of individual members of that credit union may be protected up to a maximum of €12,700.00.”

I am sure the ILCU will agree that both Sligo and Cashel reasonably outline its SPS in line with its own communications. That’s if you can find it as it isn’t published on its new website. Its new website merely says:

"Are my savings secure?
Credit unions affiliated to the Irish League of Credit Unions are members of the Savings Protection Scheme." http://www.creditunion.ie/Default.aspx?p=102&n=106

The new site offers no explanation as to what the SPS is. You have to travel to its old website, which takes knowing where to look, and three clicks. Hidden away within "ILCU Login - ILCU members area has moved"/"Irish League of Credit Unions"/"Monitoring/Supervisory Activities" there it is !

“The SPS protects the individual savings of members by making sure that credit unions are financially and administratively sound and by providing remedial help to any credit union which shows signs of weakness in these areas. Participation in the SPS does not confer a legal right on a credit union to receive any financial assistance under the scheme. Provided assistance is given under the scheme the savings of individual credit union members may be protected up to a maximum of EUR 12,700.” http://www.ilcu.ie/publisher/index.jsp?re=0&&1nID=93&pID=597&nID=3037

Of course ILCU has been aware for some time of the ambiguity in its member’s SPS communications despite its long standing direction: “Under no circumstances should the Savings Protection Scheme be referred to as a “Guarantee Scheme”.

Finally it seems the Regulator may have a role to play, given its powers under the CU Act to control credit union advertising. It would appear to be possible for the Regulator to insist credit unions accurately communicate/advertise the ILCU SPS. At one time the Regulators site stated the SPS provided "an important level of protection" - it no longer contains any reference to the SPS.

Which is starkly contrasted to its reference to the Banks & Credit Insititutions-Deposit Protection Scheme here:

http://www.ifsra.ie/frame_main.asp?pg=%2Findustry%2Fin%5Fcar%5Fintr%2Easp&nv=%2Findustry%2Fin%5Fnav%2Easp

and here

http://www.itsyourmoney.ie/index.jsp?1nID=93&2nID=96&pID=145&nID=385&aID=0#deposit