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Fimbra apologises in High Court to West Bromwich

Fimbra has been forced to make an embarrassing apol ogy in the High Court to West Bromwich Building Society.

The climbdown last week was linked to a 1995 draft report by then Fimbra legal officer Robert Guest. The report, which was leaked to MPs, alleged the society was promoting risky home-income plans through a firm of IFAs and leaving borrowers with huge debts.

West Bromwich issued a writ for libel against the regulator after coming under heavy fire for supposedly supporting the sale of the plans through collapsed IFA Fisher Prew Smith.

The report alleged that West Bromwich&#39s marketing support for the Hips amounted to a tied arrangement and that it broke its duty of care to its customers.

The society says it merely provided the mortgages connected to the Hips and is not responsible for how they were sold.

Secretary and general manager Stephen Karl says: "Everything in that report was untrue. It was a set of lies and gossip pulled together. We are delighted they have acknowledged they were wrong."

Fimbra, in one of its final acts before it is wound up, told the Court of Appeal that the document was never intended for publication and was a draft report to allow SIB to investigate the allegations. Fimbra apologised for the damage caused.

It is thought to be the first time that a regulator has apologised in this way.

West Bromwich says it is not pursuing Fimbra for damages and has paid its own legal costs.

The society offered a series of compensation measures to around 1,400 elderly borrowers last year although it says it has no legal liability to offer compensation but acted out of concern for its customers.

West Bromwich still faces a High Court battle in February with the Invest ors Compensation Scheme, which is trying to recoup compensation paid out to clients of Fisher Prew Smith.

The ICS has paid out more than £14m to 1,074 clients of the collapsed IFA.


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