Are members liable for Building Societies debts?

MrMartyn

Are the "members" of a Building Socitey liable for it's debts in the event that it were to go bust?

The reason I ask is because a few years ago I opened a savings account at a Building Society on behalf of my niece, in order to keep her savings safe and earn some interest on them. However, the Building Society occasionally send me letters about stuff like voting at their AGM (which I've neither the time nor the interest to do). I notice they talk as though I am a "member" of the Building Society. I'm not sure exactly what they mean by "member", but in the light of the current financial crisis, I started wondering what would happen if a Building Society were to go bust. I only opened a savings account, so obviously I would not expect to ever be liable for any debts. I looked up "Building Society" on the internet and studied the website for the provider of my niece's savings account, but all I saw about membership was talk of sharing profits. I could not see any mention of liabilities. I'm hoping that someone can put my mind a rest about this.

Thanks,
MrMartyn

Aegis

You're not liable, no.

Paul_Herring

MrMartyn wrote: »

However, the Building Society occasionally send me letters about stuff like voting at their AGM (which I've neither the time nor the interest to do).

I thought now-a-days all of them gave some sort of option to vote online - the few I've had such dealings with have. (Yorkshire BS is the only one I can remember by name.)

Robert_Sterling_3

This may be the right time for me to tell a little story about the Grays Building Society.

See Malarky's link.

I knew H P Jaggard quite well.

I wrote quite a lot about him at Carpetbagger.com now ipoints

and also at themoneybox

Sometimes as Building Society Bob and sometimes as Robert Shilling ( 15,000 posts )

cvd

Agree with the other posters, you are not liable.

Of course carpetbaggers have the attitude that they are not liable for any losses but expect to profit from any success.

Same attitude as Sir Fred Goodwin - only he was better at it.

chris1

Robert_Sterling wrote: »

This may be the right time for me to tell a little story about the Grays Building Society.

OK go on then...

Milarky

Robert_Sterling wrote: »

This may be the right time for me to tell a little story about the Grays Building Society.

Found this...

Rafter

As a deposit holder in a building society you effectively own a 'share' that gives you membership rights.

In the same way as a shareholder in a company, you are only liable for your investment and not any other debts.

If a Building society did go bust, it would be because they had loads of bad debts from mortgage customers or in their liquidity book and therefore would not be able to repay every savings customer if they all withdrew their funds.

In this situation, normally a bigger society would bail them out. Failing that the FSCS guarantee would kick in and deposits up to £50,000 would be protected.

R.

realaledrinker

Rafter wrote: »

If a Building society did go bust, it would be because they had loads of bad debts from mortgage customers or in their liquidity book... Like Britannia, then -£115m* written off in the accounts just out.

In this situation, normally a bigger society would bail them out. Like the Co-op.

* loan loss provisions of £57.8m - sub prime mortgages & losses on loans for inner city BTLs
* £57.4m provision relating to exposure to two failed banks - Kaupthing & Leaman