Lloyds Banking Group to review business customer cases over HBOS scam
Lloyds Banking Group said it will carry out a review and decide whether to compensate business customers who became victims of fraud at the hands of former HBOS staff.
The bank said it will "redress if appropriate" after assessing all customer cases which may have been affected by criminal activities linked to the former HBOS impaired assets office in Reading.
It is understood that around 50 firms are already being considered as part of the review, but the number could rise as the bank encourages customers to step forward if they think they have been scammed.
The move comes after a group of corrupt financiers who carried out a £245 million loans scam and squandered the profits on high-end prostitutes and luxury holidays were jailed on Thursday.
Consultant David Mills, 60, bribed Lynden Scourfield, 54, who looked after corporate customers at HBOS's Reading branch until 2007.
Southwark Crown Court was told that Scourfield took bribes in the form of luxury holidays and sex parties in return for arranging loans which allowed corrupt financiers to profit from rip-off consultancy fees.
In a statement, Lloyds said: "Customer cases will be considered afresh in light of all relevant evidence including new evidence that emerged during the trial.
"Since the investigation began in 2010, it was important that the group did not do or say anything that could subsequently prejudice the trial.
"The group deeply regrets that the criminal actions have caused such distress for a number of HBOS business customers."
The bank is currently in talks with the Financial Conduct Authority about appointing a third party to help carry out the review.
Lloyds said it will assess customers managed or involved with Quayside Corporate Services (QCS) - a consultancy firm ran by Mills.
It will also review cases referred by convicted former HBOS staff to QCS, as well as any new customer complaints.
It follows calls from a group of MPs on Monday demanding Lloyds bosses provide "proper compensation" for defrauded businesses.
The All-Party Parliamentary Group on Fair Business Banking said neither HBOS nor Lloyds, which took over the bank in 2009, had adequately investigated complaints from small business customers of Scourfield.
In an open letter to Lloyds chief executive Antonio Horta Osorio and chairman Lord Blackwell on behalf of the APPG, SNP MP George Kerevan said: "There are a large group of aggrieved business people who have lost their livelihoods, some their homes and, critically, have endured years of financial duress and personal stress."
Scourfield was jailed for 11 years and three months while Mills was given 15 years at Southwark Crown Court on Thursday.
Michael Bancroft, 73, was jailed for 10 years, Mark Dobson, 56, for four-and-a-half years, and John Cartwright, 72, for three-and-a-half years for their various roles in the fraud between 2003 and 2007.
Mills's wife Alison, 51, also played a major role in the corruption and was sentenced to three-and-a-half years.