The Financial Ombudsman Service has found against Norwich & Peterborough Building Society in relation to a Keydata complaint in its first final decision on the matter.
The FOS issued a ruling against N&P over the sale of a Keydata Lifemark product last year, which the society contested.
The FOS has now published its final ruling which has found against N&P’s appeal, the Mail on Sunday has reported. The paper says there are around £10m of similar claims lodged against the building society.
N&P chief executive Matthew Bullock said in August that the society could face a bill of up to £50m for covering losses of clients advised to invest in Keydata. Many clients have since claimed through the Financial Services Compensation Scheme but some, particularly those with claims over £48,000, have gone to the FOS.
The FSCS has the power to reclaim sums paid out on behalf of the industry if it believes another party is to blame.
Regulatory Legal Solicitors is handling around 400 complaints relating to just under 1,000 Keydata sales.
In January the FSCS announced a £93m interim levy on advisers, mainly to cover the cost of compensating Lifemark investors.