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Last Updated: Saturday, 10 November 2007, 13:31 GMT
First Solution clients still wait
By Bob Howard
BBC Radio 4's Money Box

Fazal Mahmood
Fazal Mahmood was one of the directors of First Soultion
Around 2000 people who lost money when the money transfer business, First Solution, collapsed in June, are still waiting for their cash to be returned.

The firm was due to be wound up at the High Court this week, but the hearing has been delayed for a fortnight.

The Official Receiver was appointed in August to try to get around 1.7 million of customers' money back.

A number of former First Solution agents have said they want to buy it, but no details have yet emerged.

First Solution was used by members of Britain's Bangladeshi community to send money home to relatives in Bangladesh.

Customers who attended the High Court were angry that they must wait another two weeks for the hearing.

Distress in the UK and Bangladesh

Azmel Hussein runs a group trying to help people who have lost money.

He told BBC Radio 4's Money Box programme the loss of money is causing extreme hardship for the families in Bangladesh that were relying on it, especially for medical treatment:

"A lot of operations are done privately in Bangladesh - no money, no operation.

George Galloway
The Official Receiver has turned into a giant glacier... not telling the people most affected what he is actually doing
George Galloway, MP, Bethnal Green and Bow constituency

"They are poor people, they are waiting for their money and they will never forget."

Many of those who have lost money live in the Bethnal Green and Bow constituency of MP George Galloway.

He is calling for the City to help compensate those who have lost out.

He has been critical of the way the Official Receiver has handled the case:

"The Official Receiver has turned into a giant glacier, moving millimetre by millimetre and not telling the people most affected what he is actually doing."

The Official Receiver in the case - Paul Titherington - says he cannot reveal details of any agreement, as to do so may jeopardize any deal.

He said the winding up proceedings were delayed because he had changed the name of First Solution to XTL Limited in order to sell the company name as an asset.

He said an error meant the court papers were not changed to carry the new name in time for the hearing.

Mr Titherington said he hoped to make an announcement regarding the company's position next week and he was hopeful that at least some of the customers' money would be returned.

Lack of regulation

Unlike people who have lost money through other financial firms, the victims in this case have no official protection or route to compensation.

Money transfer businesses like First Solution are not regulated, although the government intends that they should be within the next couple of years.

A fund which was set up to help victims was closed after raising just 100.

The Companies Investigation Branch is looking into the cause of the collapse.

BBC Radio 4's Money Box was broadcast on Saturday,10 November 2007 at 1204 BST.

Money Box



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10 Sep 07 |  Moneybox
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08 Sep 07 |  Moneybox
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