Lloyds compensates just five of the 67 HBOS fraud victims, a month after its own deadline

 
Lucy White
British bank HBOS corporate headquarters
Two bankers were jailed in February over the HBOS Reading fraud (Source: Getty)

Lloyds Banking Group has compensated just five of the 67 victims affected by its HBOS Reading fraud, a month after the expiry of its own deadline.

Final offers have still only been made to 16 impacted customers, the bank revealed, totalling £6.5m.

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A further 14 are in the “final stage of assessment” by Lloyds and Professor Russel Griggs, former chair of the Confederation of British Industry's UK SME Council.

“We are continuing to make progress in getting offers to victims of the HBOS Reading fraud,” said Adrian White, chief operating officer for commercial banking at Lloyds.

“It is important we get the fullest possible information from victims to ensure we can factor in everything that should contribute to their compensation offer.”

The HBOS Reading office dealt with financially distressed companies, and two of its bankers were jailed in February for a scheme which ran businesses into the ground for their personal gain.

Lord Cromwell, chair of the all-party parliamentary group on fair business banking who described the compensation scheme as a “running sore”, said:

There appears to be a lack of transparency, and therefore a lack of public confidence, in the processes set up unilaterally by Lloyds for assessment and settlement of claims.

Inevitably this creates suspicion and we are hoping that Lloyds will now accept our repeated invitations to make the processes – including the nuts and bolts of valuing claims – far more open to assessment by victims and their advisers.

Without that it is hard to see how this matter can end other than in bitterness and litigation.

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In June, Lloyds agreed to give a one-off payment of £35,000 to all its affected customers “to ensure that no-one in the review should face financial difficulty in covering day-to-day living costs whilst the review is ongoing”.

These payments totalled more than £3m, while almost £1m has been paid in professional advisory fees and “further hardship payments”.

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