Lloyds Banking Group to look at compensation for fraud victims
Lloyds Banking Group has recruited Professor Russel Griggs to spearhead an investigation into whether it should compensate customers who became victims of fraud at the hands of former HBOS staff.
The move follows the bank's pledge last month to carry out a review and "redress if appropriate" once it had assessed all customer cases which may have been affected by criminal activities linked to the former HBOS impaired assets office in Reading.
Lloyds said Professor Griggs will " agree the scope, methodology and individual case outcomes of the review" to ensure fair outcomes.
The bank has made the appointment following a consultation with the Financial Conduct Authority (FCA).
It comes after a group of corrupt financiers were jailed for carrying out a £245 million loans scam and squandering the profits on high-end prostitutes and luxury holidays.
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.
The bank said Professor Griggs was chosen for the role because of his knowledge of small-and-medium-sized firms and his prior experience leading " high profile reviews of a complex nature".
He was chair of the Confederation of British Industry's (CBI) UK SME council between 2007-2010 and was an independent external reviewer to SME appeals process in 2011, which ensured firms had a fair appeal after being refused credit.
Lloyds said in February that it would assess customers managed or involved with Quayside Corporate Services (QCS) - a consultancy firm which was run by Mills.
It added that it would also review cases referred by convicted former HBOS staff to QCS, as well as any new customer complaints.
Updating on Monday, the lender said it had now written to the majority customers impacted by the HBOS scandal who will be included as part of Professor Griggs' review.
Customers will also be able to give their views on the planned review as part of a series of upcoming meetings, the bank said.
The review follows calls from MPs 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.
Scourfield was jailed for 11 years and three months while Mills was given 15 years at Southwark Crown Court on February 2.
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.