Lloyds Bank compensates just five victims of multi-million pound HBOS fraud

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Lloyds Banking Group has compensated just five out of 67 confirmed victims of , almost a month after it said deadline for paying all of those affected.

Lloyds said on Friday it had made offers to less than half of those who fell victim to what a judge described as un “utterly corrupt scheme” which left some customers “cheated, defeated and penniless”. Of those just five customers have accepted.

The bank, which owns , has offered just £6.5m out of the £100m it set aside to pay for the compensation. Lloyds said in April that it would make offers to all customers by the end of June.

Adrian White, Lloyds’ chief operating officer for commercial banking, leading the review, said; “We are continuing to make progress in getting offers to victims of the HBOS Reading fraud. We have now made offers or are in the detailed assessment stage for nearly half of the victims in the review. 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.”

Lloyds said in a statement it has made offers to 16 customers and is in the final stages of assessment to make 14 more.

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Victims of the fraud have accused the bank of dragging out the compensation process and underestimating the final amount it will have to pay.

TV star, Noel Edmonds, himself one of the victims, set up a countdown clock website to pressure the bank to meet its self-imposed deadline. 

The former Deal or No Deal presenter personally wrote to Lloyds chief executive Antonio Horta-Osorio demanding at least £50m compensation for the lender’s role in the collapse of his business ten years ago.

Lloyds had denied any wrongdoing until two former bank managers at its Reading branch, Lyndon Scourfield and Mark Dobson, were convicted in January.

The men were among six people found guilty of bribery and fraud that cost customers and shareholders hundreds of millions of pounds.

They were found to have referred customers to their friends, businessmen David Mills and Michael Bancroft, who claimed to be turnaround consultants providing assistance struggling businesses.

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Instead Mr Bancroft and Mr Mills bullied the customers, squeezed them for large fees and stripped them of assets. In exchange, Mr Mills provided the bankers with prostitutes, cash and lavish gifts.

Sentencing the pair in February, Judge Martin Beddoe said Mr Scourfield “sold his soul” to Mills in exchange for “sex”, “bling” and “for swag”.

Judge Beddoe said the case involved an “utterly corrupt senior bank manager letting rapaciously greedy people get their hands on vast amounts of bank money and their tentacles into ordinary and honest businesses”.

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