Lloyds launches review of HBOS fraud compensation scheme
The lender has appointed Sir Ross Cranston to carry out an ‘independent assurance review’.
Lloyds Banking Group has been forced to launch a review of a scheme set up to compensate victims of fraud at the Reading branch of HBOS.
The lender has appointed Sir Ross Cranston to carry out an “independent assurance review” following intervention from the Financial Conduct Authority and the City minister John Glen.
Sir Ross, a professor of law at the London School of Economics and a retired High Court judge, will effectively conduct his own review of an earlier review carried out by another academic, Russel Griggs.
Lloyds said: “Due to the high level of public interest in the HBOS reading customer review, the assurance review will be led by a high profile independent party to go above and beyond a customary lessons learned exercise.”
It is vitally important that the assurance review be open, rigorous, and fair, and that the Lloyds Banking Group act upon any recommendations made Sir Ross Cranston
The bank added that the latest review will provide assurance that the original review has “delivered fair and reasonable outcomes”.
It follows concerns raised over the process, which has seen affected businesses receive compensation offers of more than £96 million.
Lloyds has set aside £100 million for victims of the fraud at the hands of HBOS Reading staff between 2003 and 2007.
However, the review by Sir Ross could lead to that figure inflated if he deems mistakes were made.
Corrupt financiers from the Reading branch were jailed in 2017 for the £245 million loans scam, which destroyed several businesses and saw the criminals squander the profits on high-end prostitutes and luxury holidays.
Lloyds rescued HBOS at the height of the financial crisis and the Reading scandal has loomed large over the bank.
One of the most high profile victims of the fraud is TV star Noel Edmonds, who is pursuing Lloyds separately for losses allegedly suffered when his former business Unique Group was destroyed.
Sir Ross said: “It is vitally important that the assurance review be open, rigorous, and fair, and that the Lloyds Banking Group act upon any recommendations made.
“I look forward to consulting with all stakeholders and I encourage interested parties to submit evidence and engage fully with the process.”
Lloyds added that it continues to “regret and apologise” for the distress caused to customers affected by the HBOS fraud.