Mr. Eoin O'Sullivan:

I wish to provide some information on the savings stamps service and how it is traditionally realised. At present, this service is realised on a paper-based medium. In other words, if a member goes to his or her credit union and hands over €2, he or she will get a paper savings stamp in return. We have been made aware of a number of issues in this regard, including loss and theft of savings stamps, a risk in the context of fraud and money laundering and the lack of an audit trail. At present, there is no information which links a member to any stamp which he or she purchases.

In regard to the savings service as a whole, we as a company have taken it from a paper-based medium to a digital medium. Instead of members getting a paper-based stamp, they get a tamper-proof card and information on it is linked to the database. From a loss or theft point of view, the card cannot be copied. For example, if I were to lose my card, a photograph is linked to it if it were to be handed into the credit union and there is also PIN protection on it. Therefore, those provisions solve those two issues.

In terms of fraud and money laundering, some paper-based stamps are issued from a machine in the banking hall, which removes staff from being involved in that service and there are no controls in place in that respect. If I were to purchase such stamps in the credit union, there would be a lack of an audit trail. I do not have a member number in that respect and there is not a name attached to those stamps, therefore, the system is open to money laundering in that respect. There is no audit trail in place and no reports available on stamps. That ties into some of the recommendations that were made in the draft scheme of the credit union Bill.

Some issues are highlighted on risk management systems and systems of control, operational risk and internal audit. Our minimum proposal is a suggested amendment to the statutory instruments under which savings stamps are outlined. The condition to be fulfilled currently is that the credit union must account on its books for all sorts of transactions and we would make an additional minimum amendment that an audit trail should also be provided in respect of stamps either on a paper-based medium or a digital medium.