Five of 16 HBOS fraud victims accept payout

ONLY five victims of the £245m HBOS Reading fraud scandal have accepted compensation from Lloyds Banking Group despite the lender making offers to 16 customers.

The lender has already missed its own deadline of the end of June to make offers of redress to all 67 small firms it has identified as having been hurt by the scam.

Lloyds has set aside £100m to make amends to business owners who suffered in the fraud, although its compensation scheme has faced fierce criticism from the victims, including the celebrity Noel Edmonds. He is claiming £70m alone, following the collapse of his company, raising concerns Lloyds has not put aside enough funds. The bank disclosed yesterday that while it had made 16 final offers totalling £6.5m, just five had been accepted.

It said that, overall, 30 customers had either received an offer or were in “the detailed stages of assessment and will receive an offer shortly”.

Lloyds announced in early February that it would examine the case for compensation and its slow progress is likely to raise questions about the scheme, which is led by Professor Russel Griggs. It has had to pay out nearly £4m to cover victims’ expenses while they wait for its review to conclude.

“We are continuing to make progress in getting offers to victims of the HBOS Reading fraud,” said Adrian White, Lloyds’ chief operating officer for commercial banking. “It is important we get the fullest possible information from victims to ensure we can factor in everything that should contribute to their compensation offer.”

Critics of the compensation review have attacked its slow pace and questioned the appointment of Prof Griggs after it emerged he had previously carried out consultancy work for Lloyds.

Lloyds bought HBOS in a rescue deal in December 2008 at the height of the financial crisis.