Revolt threat over building society case

The society could see its profits wiped out if it loses a legal battle with Soccer Savings, which is claiming a breach of contract.

The directors of Glasgow-based Soccer Savings launched the action after the society withdrew its handling of a range of football club-branded accounts last year.

Soccer Savings alleges breach of contract and damages of £1m after the society agreed to host the accounts for five years but closed them to new savers after a year.

But the society refutes the claims and in its annual report says that it believes “no such breach has arisen… the society is defending legal action raised by Soccer Savings (Scotland), which is currently in progress. Accordingly, no provision has been made in these accounts with regards to this matter.”

Members will vote on the report at the 163-year-old society’s annual general meeting in Inverness on Thursday.

David Cassidy, who held four football-branded accounts for himself and his children, said he is concerned about the building society’s failure to tell savers and members about the implication of the change in the accounts and potential litigation.

He said: “I received a letter in June which said they weren’t going to open new accounts and there was no indication about whether existing accounts would be run in the same way.”

He said he was told his savings accounts would continue to attract a small rate of interest, but the society did not answer questions about whether there would still be the advertised benefits such as chances to meet club players, managers and attend special events.

“There were various events with some of the clubs, and we got to go before the game to meet some of the players,” said Cassidy.

“They still have the money in the bank and account holders will not be aware that there is no longer a link with the football clubs.

“I am concerned about the legal case. I didn’t see anything about it in the annual accounts, but it could have been there in the small print.

“I suppose the situation is rather typical of a banking sector which does not instill confidence or trust in customers, even those of mutual organisations who like to take the moral high ground.”

The football savings schemes were offered to fans of Celtic, Rangers, Hamilton Academical, Hearts and St Mirren,

Gerry Kay, chief executive of the Scottish Building Society, which made a pre-tax profit of £799,000 last year, said the schemes were withdrawn after disappointing performance.

“The initiative set off with high hopes and it didn’t really work out,” he said. “It is as simple as that.

“The projections that were produced for us didn’t materialise and the contract was brought to a close.”

He said the building society did not have to tell members about the £1m claim as the firm’s auditors and solicitors have told the board it has a “strong case”.

“Figures are figures are figures,” said Kay. “We are confident in the progress of this case that we are in a good position.

“The situation has been looked at by our external auditors as well, so we have had an independent review of the position in line with our solicitors. The feeling is we do have a strong case.”