Woman held as officers probe credit union fraud

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POLICE have arrested a woman on suspicion of fraud following the collapse of a Yorkshire credit union.

More than 5,700 savers were affected when the North Yorkshire Credit Union was put into liquidation last week after accruing debts of more than £400,000 since opening in 2009.

The police investigation is separate to one being carried out by the Financial Services Authority.

A spokeswoman for North Yorkshire Police said yesterday that a 57-year-old York woman has been arrested in connection with an investigation into alleged fraud at the credit union relating to two loans and cheques to the value of £3,130 and has since been bailed.

The union got a £200,000 start-up loan from North Yorkshire County Council and a further £100,000 from York Council.

Both loans have now been written off.

A replacement organisation, overseen by the South Yorkshire Credit Union, is due to open with a further £100,000 grant from the two authorities along with Scarborough Borough Council.