A MEMBER of a Barrhead community bank that has gone bust, owing members more than £3million, has called for a full investigation into its demise.

Pioneer Mutual Credit Union, based in Main Street, went into administration last Wednesday and immediately ceased trading.

The Financial Services Compensation Scheme (FSCS) has stepped in to protect its 3,500 members and has said they will be sent a cheque for the amount in their account by the end of this week.

FSCS expects the total payout to Barrhead customers to be around £3.3m.

Leeds-based PKF GM have been appointed as administrators and will investigate why the credit union failed and who, if anyone, is responsible.

Among those affected by the collapse is business development manager Gordon Keenan, who has set up a number of credit unions in the past.

Mr Keenan, who was a member of Pioneer for six years, claims there was a lack of transparency and accountability about the way the organisation was run.

He said members weren’t notified of AGMs or supplied with up-to-date accounts, as is their right.

Mr Keenan, a former chief executive of Neilston Development Trust, has now contacted the administrators to express his concerns about how Pioneer was being run.

He told the Barrhead News: “I joined Pioneer because I am a big fan of credit unions.

“Pioneer had big ideas without backing them up. My concerns are over the governance and running of this particular credit union.

“It was a co-operative that was meant to be run by the members but this wasn’t happening.”

Mr Keenan said he has no doubt that Pioneer was started with “good intentions” and provided a vital service to the local area.

However, he added: “They didn’t listen to members. Had they done so, all this could have been avoided.”

Mr Keenan, from Clarkston, previously complained to regulators such as the Financial Ombudsman and the Financial Conduct Authority about the management of Pioneer but says nothing was done at the time.

Caroline Rainbird, FSCS chief executive, has told Pioneer members their money is “safe.”

She said: “No-one needs to worry or do anything, as they should receive their money within a week.”

It’s understood a helpline set up by administrators has been inundated with calls from anxious members.

Councillor Danny Devlin said many of his Barrhead constituents have been affected by the collapse.

He added: “I will be working to ensure that all members have their monies refunded as promised.”

A spokesman for PKF GM said: “We’ll be working towards an orderly wind down of the credit union, including fulfilling our statutory obligations to report on any issues of which we become aware.”

Credit union members told: Your cash is safe

Credit unions are financial cooperatives that are owned and controlled by their members and operated on a not-for-profit basis.

Pioneer Mutual Credit Union was previously known as East Renfrewshire Credit Union and, before that, Barrhead Credit Union when it was formed in 1993.

The Financial Services Compensation Scheme (FSCS) protects customers of financial services such as credit unions if the organisation is unable to pay back money it owes to its customers.

The scheme was set up by Parliament in 2001 and is funded by the financial services industry.

FSCS will declare a credit union in default if it is unable to return money to any of its customers.

Dina Devalia, of administrators PKF GM, has said all of Pioneer’s savers will have their money returned by the FSCS.

“You don’t need to do anything to get your money back,” she added.

“Savers should look out for a letter in the post from the FSCS in the next few days.”