LLOYDS Banking Group is to shell out at least £1.9 million to customers affected by the HBOS fraud scandal as it misses a self-imposed deadline to make compensation offers.
The high street bank is handing the lion’s share of the victims £35,000 each to help pay for bills and expenses after failing to wrap up the process by the end of June.
The lender will make ex gratia payments to 55 of the 67 customers included in the review because it has been unable to track down the other 12. However, it is understood the bank would still honour the payments if those customers came forward at a later date.
A source close to the review said £35,000 is likely to be given to more than 55 individuals because firms have more than one director, meaning there are more impacted individuals than companies.
The bank said seven customers had received final offers as part of the process while eight cases are in the final stages of assessment.
Adrian White, Lloyds chief operating officer for commercial banking, said: “Since the end of the HBOS Reading fraud trial, we have been working hard to provide fair, swift and appropriate compensation.
“But, as we have met and spoken with victims, many have asked us for more time.
“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.”
Lloyds, which rescued HBOS at the height of the financial crisis, has set aside a £100m pot for customers affected by the fraud, which took place during a four-year period between 2003 and 2007 at the hands of former HBOS Reading staff.
The corrupt financiers were jailed earlier this year for the £245m loans scam that destroyed several businesses, before they squandered the profits on high-end prostitutes and luxury holidays.
Lloyds recruited Professor Russel Griggs to spearhead an investigation into whether it should compensate customers who became victims of fraud.
Victims have been asked to provide detailed input into the review, not only covering the economic losses they have incurred, but also highlighting indirect losses such as legal fees and other personal costs.
Among them is former Deal Or No Deal host Noel Edmonds, who launched a £50m-plus compensation claim against the lender in May. Edmonds has accused Lloyds of “foot dragging” over compensation payouts to fraud victims, and has also admitted he came close to taking his own life after the financial fraud helped destroy his former business Unique Group.
As part of his campaign, Edmonds has set up a website – available at www.banklloyds.claims – which features an “honesty countdown” clock tracking the amount of time left for compensation offers to be made based on the bank’s timeline.
The website now has an accompanying Facebook page which features a number of videos of the TV celebrity criticising the bank; a spoof radio station playing music along with Edmonds providing a voiceover for the banking group, entitled Lliars Banking Radio; and a promise of a TV channel – due to be launched today – along with an advertisement campaign.
In response to the announcement, Edmonds said: “There is a yawning chasm, not even a black horse could jump, between what Lloyds’ executive management say and what they do.”
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