Lloyds to pay £100m fraud compensation


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Lloyds Banking Group has expressed its deep regret over the fraud

LLoyds has announced that it is setting aside a further £100m to compensate customers who lost money in a fraud scandal.

Six people, two of whom had worked for Halifax Bank of Scotland (HBOS) – owned by Lloyds – were jailed in February.

The court heard they stole hundreds of millions of pounds from small businesses who were their clients.

At the same time, the Financial Conduct Authority (FCA) announced that it is re-opening an enquiry into the fraud.

Lloyds has already set aside at least £250m to cover other costs arising from the case, which was centred on the HBOS office in Reading.

“As I have stated before, we would like to express our deep regret and apologies to any customers directly affected by the criminal behaviour of these individuals,” said António Horta-Osório, the chief executive of Lloyds Banking Group.

“We are absolutely determined that victims of the crimes committed at HBOS Reading are fairly, swiftly and appropriately compensated. We take responsibility for putting right the wrongs that were committed at HBOS Reading at the time.”

FCA investigation

Some of the small businesses that lost money from the fraud collapsed as a result.

The bank said it would provide such victims with immediate payments on a case-by-case basis. Those in financial difficulty will be helped with day-to-day living costs.

They will also be helped with legal fees, and have their existing debts written off.

In addition, Lloyds will appoint an independent lawyer, Professor Russel Griggs, to determine whether the bank investigated the crime properly at the time.

The FCA said it would resume an investigation into the fraud, which it suspended in 2013, pending an enquiry by Thames Valley Police.

It will examine who knew what within the Lloyds Banking Group, and whether they told the FCA.



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