Lloyds Banking Group has defended its missed HBOS compensation deadline and provided an update on the review.
The company was aiming to have compensated victims of the scandal by the end of June and has come under fire for failing to do so, not least from TV celebrity Noel Edmonds, who is among those claiming compensation.
Lloyds, which has identified 67 victims, said today that final offers have been made to seven impacted customers and that a further eight cases are “in the final stage of assessment”.
In addition, the bank said it has made interim payments totalling £485,000 to 13 customers, averaging £35,000 each, “as part of its commitment to ensure that no one in the review should face financial difficulty in covering day-to-day living costs whilst the review is ongoing”. The group said today it has written to all victims to offer a “one-off ex gratia payment of £35,000… to cover ongoing bills and expenses”.
Lloyds said that once it has received the necessary information from victims, it takes them an average of four weeks to make an offer, “depending on the complexity of the case”.
Lloyds kicked off a review process, conducted by Professor Russel Griggs, in relation to the HBOS scandal in early May. The bank initially set aside £100m to offer in compensation.
The compensation is being paid out to small businesses that fell victim to the fraud scandal that engulfed the Reading office of HBOS, the company which Lloyds bought in 2008. Between 2002 and 2007, troubled small businesses were referred to turnaround consultants Quayside Corporate Services, after which they were advanced sums of money so large they could never be repaid. The companies were then charged hefty consultancy fees and many subsequently went into liquidation.
Lloyds commercial banking chief operating officer Adrian White said: “We are disappointed that getting to offers is taking longer than we had hoped, but we are committed to doing everything we can to support those affected as we continue with the review.”
How Noel Edmonds is taking on the banker
Lloyds is probably cursing its luck that Noel Edmonds, the former host of Deal Or No Deal, is one of the 67 victims of the HBOS scandal.
Over the past couple of months, the celebrity has publicised letters to the bank and launched a website counting down to the end of June (when the bank said it would aim to complete the compensation process).
The website now has: a Facebook page featuring videos of Edmonds criticised the bank; a radio station playing music along with Lloyds commentary from the celeb; and promises of a TV channel launching on 1 July along with an ad campaign.