Yahoo Finance Lloyds likely to extend compensation deadline over HBOS fraud scandal
Lloyds Banking Group is expected to extend the deadline for making compensation offers to victims of the HBOS Reading fraud, as it emerged only one of 64 affected customers has received compensation.
Lloyds had pledged to do so by the end of June. The compensation is to come from £100m the bank has set aside for the victims of the fraud, which took place between 2003 and 2007 before it bought HBOS at the height of the financial crisis.
Six people were jailed in February for the fraud, forcing Lloyds to say it would pay compensation to the individuals. The bank appointed Prof Russel Griggs to act as an independent reviewer.
Lloyds would not say how many compensation offers had been made, but it was thought that just one of the 64 had agreed to the terms and received payment from the bank. The fraud victims include TV presenter Noel Edmonds.
Edmonds, who seeks £73m for what he claims is the destruction of his Unique business empire, has accused the bank of “foot dragging” over compensation payouts to victims.
His lawyers are maintaining the pressure on the bank, describing the process for claiming compensation as “charade designed to cause delay and wear down my client”.
Jonathan Coad at Keystone Law has received correspondence showing Griggs has hired a “team of professional advisers” to assist him. They are though to be the accountancy firms RSM, and Mercer & Hole.
Griggs said: “The review is making good progress, and I am pleased with how many customers are coming forward and speaking to us productively.
“We have already made some offers to customers and have started to receive acceptances. We do recognise, however, that some customers may need longer to provide their input and we will give them the time they need.”
Coad argued the victims of the fraud were dependent on Lloyds’ assessment of the level of compensation and that they did not have access to experts to assess them. The system was “designed to cheat HBOS fraud victims from their legitimate entitlement by way of compensation”, he said.
Lloyds insisted that this was not the case. “Part of [Griggs’] role is to agree the individual case outcomes, and to ensure that these outcomes are fair. He will make his decisions independently,” a spokesperson said.
“We continue to work at pace with Professor Griggs to ensure appropriate redress is provided to impacted customers. Where customers have already provided information, we remain on track to make compensation offers by the end of June and we are pleased to confirm the first offers have already been made.”
The fraud related to the activities of Lynden Scourfield, a former HBOS banker, who was jailed along with his business associate David Mills. Scourfield had pleaded guilty to the scheme, which involved introducing his small business clients to Mills, who was convicted along with his wife, Alison, and their associates Michael Bancroft and Tony Cartwright of running the fraud.
Scourfield was bribed by Mills with foreign cruises and sex parties. In return, Scourfield agreed to give inappropriate loans to struggling businesses, which allowed Mills and his associates to profit from imposing high consultancy fees on those firms.
