Money Merge Account Fraud

Credit union's depositors face losing half their savings

Hibernian Credit Union depositors face losing up to half of their investments after alleged employee fraud, as the Catholic organisation attempts to merge with a larger benefit society to stave off liquidation.

On Saturday, the credit union and the Hibernian Catholic Benefit Society held annual meetings at which they voted for a plan to merge. Depositors were also told that they faced losing 40 per cent to 50 per cent of their deposits.

The Serious Fraud Office announced a joint investigation with Wellington police on June 1 into allegations of employee fraud at the society dating back up to a decade.

It now appears that about $1.5 million, roughly evenly split between the union and the larger benefit society, is missing.

The credit union worked in a similar way to a retail bank, offering loans and deposit accounts, while the benefit society offered services, such as medical insurance, and funeral benefits.

Founded in 1869, the society says its philosophy was "Catholics helping Catholics".

While it is thought that no one depositor held more than $40,000 with the credit union, its president, Mike McBride, said some families might face a considerable impact because several relatives held accounts.

"There are people in that situation, and that's the real tragedy of it. Parents putting money aside for grandchildren, for education and things of that nature, slowly building the fund up. They're going to suffer."

Because of the scale of the losses at the credit union, which had just over $1m in deposits, it faces liquidation, unless it is allowed to merge with the larger society, a plan which requires the approval of both the members of both Catholic organisations, and Registrar of Friendly Societies and Credit Unions.

McBride said the costs of liquidation costs would probably mean that members would face even larger losses because of the cost involved.

"This proposal will save what is left, and if we get any recoveries from the theft, that will go into providing members funds too," he said.

McBride stressed that the 40 to 50 per cent loss of deposits, which he warned members about on Saturday, came before the organisation took into account any funds which might be recovered either from the alleged offender or others.

Members unanimously voted to not reappoint Grant Thornton as auditors, and calls have been made for the auditors to cover the losses, after not detecting the fraud.

Debunking the Money Merge Account Scam (Games Lenders Play, Part 8 ...

Thing that everyone's pushing of late. I have gotten so much junk mail about this from more originators (who don't know who I am) and wholesalers (who should) that I'm going to have another whole go at the entire concept. The claim most often advanced is "pay off your mortgage in a fraction of the time!" In fact, typical numbers say they're only going to do a fraction of the good done by biweekly payment programs , which effectively make one extra payment per year. Money merge accounts or Mortgage Accelerators (to use the term I originally learned years ago) have been pushed and over-promised so badly of late that I hope whoever manages to do an elementary search will be able to find a voice of sanity.

These wasteful loans that waste a homeowner's money are fast becoming the current market's negative amortization loan as far as marketing goes. These things are being pushed hard, consumers are being led to expect far greater results from them than they are likely to achieve, with the results being that those consumers who sign up for them are wasting their money. If they're not as bad as negative amortization loans, that's still damning with faint praise if ever there was such a thing. Not as bad as the loan that encouraged people to buy a more expensive property than they could afford, put them more deeply into debt with every passing month, ruined their credit ratings, and caused them to lose the property they over-extended to buy, as well as setting the United States as a whole up for the worst financial crisis we've experienced in the past eighty years. Well, it is kind of a high bar for lenders to get over, and they haven't done it here - but that's not due to concern for consumers.

(one way of looking at it with considerable merit was that the Era of Make Believe Loans was scamming investors paycheck in the mortgage account, where it lessens the amount of interest you pay on a day-to-day basis. Then you pay your other expenses of living out of the account, gradually increasing the amount back up until the next time you get paid. The idea is that by paying down the balance with your entire paycheck, less interest accumulates and people making the same regular payments will pay their balances down faster with the same balance.