I don't believe it is. Or at least, not in the same format that Jeremy implied. The Bambers would have been fully aware of the legal boundaries -tighter then, than now- and they had no legal jurisdiction over the children, ergo, there wouldn't have been a conversation about taking them out of Colin's care, which was what placing them in another's care would have amounted to. Jeremy just needed there to have been the sort of conversation which would stir Sheila into action.
They would have been fully aware of the legal position, yes, but Colin wasn't there to argue back/speak up for Sheila, who may not have been able to cope with her parents on her own.
I can well imagine it happening, but, of course, it's also possible that it didn't, and Jeremy made the whole thing up. We'll never know, because there are no witnesses except Jeremy, and he isn't going to be believed, even if, on this occasion, he was telling the truth!