Police probe Fife credit union fraud allegations

Kingdom Credit UnionA Fife-based credit union has become embroiled in a police fraud investigation amid reports that funds were embezzled.

Police are probing accounts at Glenrothes and Methilhill-based Kingdom Credit Union Ltd.

The news came as it was announced that the union will not be paying its members a dividend for the first time in its 11-year history.

Assurances have been given, however, that because all deposits are covered by the Financial Services Compensation Scheme, depoits are “100 per cent safe”.

In a letter received by shareholders at the weekend, Kingdom Credit Union Ltd chairwoman Carol McLennan said: “I am saddened to report that an embezzlement of funds was discovered on August 11 2014.

“This was immediately reported to the police, our insurers, our auditors and the PRA (Prudential Regulatory Authorities).

“All credit unions are required to hold fidelity bond insurance to cover for fraud and we have placed a claim with our insurers for this.”

She continued: “We have also been advised that criminal charges have been made and proceedings should start in the near future. We have been advised by the police that we cannot give any further details on this at this time.”

She added: “We would like to assure members that at no time were their shares in any danger as we are part of the Financial Services Compensation Scheme, which covers all shares up to a maximum of £85,000.”

The board of directors’ report confirmed the past year had seen a steady increase in membership to more than 5,000.

During the past year, members’ shares increased from £2 million to £3.4m, while junior deposits have increased from £211,000 to £303,000.

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