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NU claws back its 1998 commission error from IFA firm&#39s new owner

Norwich Union is unilaterally clawing back commission from the new owner of an IFA business that it had mistakenly paid nearly four years ago to the previous owner.

On January 16, CFS Independent managing director Andrew Harwood received a letter from NU, saying, following an internal audit, it would claw back commission of £1,214.18 that it had mistakenly paid out twice to his firm in April 1998.

But Harwood responded by saying he has no idea who the client is and that the transaction took place before he bought the firm in 1998.

Despite Harwood&#39s protestations, NU is proceeding with its claim and is deducting the cash from his account. Harwood bought back the business in September 1998 for its net asset value after selling it to an accountancy firm in 1994.

A spokesman for NU says: “We accept that it was our error but we are entitled to reclaim the money and we will be doing so. However, we are prepared to recompense him for his time in sorting out this matter. When you buy a business you buy its liabilities.”

Harwood says: “I am being forced to pay for Norwich Union&#39s own mistake, which is ridiculous. They are deducting commission so I have no choice in the matter. It is quite a lot of money for a small business.”

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