The Central Bank has found a number of major issues in relation to how credit unions operate their prize draws, including that in 30% of all credit unions where such raffles are held, a director or member of staff has won the draw.
The probe follows on from a 2016 investigation into the now defunct Rush Credit Union, where
investigators found that a total of €220,000 had been spent on 15 cars entered into various draws, but the whereabouts of the winners were unknown.
This in turn led to suggestions that a former staff member may have "won" a car in one such draw, while further allegations were made that some members of the credit union were entered into draws without knowledge or consent.
Looking at a sample of 276 credit unions, with 34 on-site inspections carried out, the review found that in one quarter of credit unions operating such draws, there was not a documented policy or procedure in place, while "in many places", the procedures were not being reviewed regularly or updated to reflect the current practice.
It also found that around around 85% of credit unions allow staff and directors to participate in prize draws, while in certain cases draws were being conducted by staff eligible to enter without any independent oversight being present.
Furthermore, approximately 30% of credit unions who operated prize draws saw staff or directors winning prizes between the period of October 2014 and March 2017.
Several credit unions were also found to have poor record keeping of members, written authorisation and withdrawal forms from such draws.
In some instances, there were no records maintained of the disbursement of prizes, and while several credit unions posted the full list of winners to their website, in local papers and in AGM booklets, still there were cases in which the winners were never contacted. Furthermore, the Central Bank found evidence that some credit unions retained correspondences with winning members on file.
The probe also discovered that 17% of credit unions operating prize draws never had the draw reviewed by either an internal or external audit.
In total, 46% of credit unions offer members the option to enter prizes with 446,000 having taken part. This number has increased by around 46,000 members between October 2014 and March 2017, with approximately €40m in prizes distributed by credit unions over the same period.
