MPs’ vow to fight for bank fraud victims
AN INFLUENTIAL group of MPs has vowed to fight “tooth and nail” on behalf of the victims of a quarter- of- a- billion pound fraud involving a major bank.
The All Party Parliamentary Group on Fair Business Banking ( APPG) has made a formal complaint to the Financial Conduct Authority about Lloyds Banking Group’s handling of the aftermath of the HBOS Reading scandal.
Six people, two of them former employees of HBOS, were convicted and sentenced to up to 12 years in prison for criminal misconduct between 2003 and 2007 at HBOS Reading.
In a statement, the APPG said: “Following extensive efforts to resolve outstanding HBOS Reading issues directly with the bank, co- chairman of the APPG Kevin Hollinrake MP, submitted a formal complaint concerning Lloyds Banking Group’s actions with regard to the HBOS Reading scandal.”
The statement added: “In December 2019, The Cranston Review concluded that the Griggs’ Review, which was set up by Lloyds to compensate victims of the HBOS Reading fraud, had been designed in such a way that it could never deliver the fair and reasonable outcomes it promised.
“In addition, the bank exhibited an ‘ unacceptable denial of responsibility’ and acted in an overly adversarial manner. The report was a damning criticism of the bank and a vindication of the representations that the APPG and victims had been making throughout the Griggs Review about its flawed and unfair design.
“As a result, a re- review is taking place under the direction of Sir David Foskett. The Foskett Panel is currently reviewing the HBOS Reading cases for direct and consequential losses. The APPG is confident that the panel has the tools it needs to ensure that the promised fair and reasonable outcomes can be achieved under its control.
This process is estimated to take another two years, and the APPG is comfortable that it is suitably independent and robust.”
However, there are some recommendations from the Cranston Review over which Lloyds has direct control, the APPG said.
These include who is included in the re- review, debt relief, hardship support and ex- gratia payments, according to the APPG.
The APPG statement added: “In some, but certainly not all, cases victims have the right of
appeal to an independent party for a final arbitration. However, in many cases no such right exists and the final judgment is left to the bank.”
In a letter to Nikhil Rathi, the CEO of the Financial Conduct Authority, Mr Hollinrake said the bank should no longer have the final say on HBOS Reading victims’ eligibility or payments, and there must be an independent arbiter to resolve any disputes regarding eligibility, distress and inconvenience payments, hardship payments and debt relief.
The statement added: “The APPG has reiterated its calls for ex- gratia payments to all victims to compensate them for the three years that the bank has wasted with a scheme that was purposely designed to fail the victims. The bank has yet to take responsibility for or acknowledge the fact that it has compounded the distress and inconvenience of the victims exponentially, and it is only right that it is held to account on this point.
“The APPG is outraged that despite clear monumental failures of judgement on their part, Lloyds Banking Group are still being allowed to be the sole arbiter of value judgements about the victims and whether or not they deserve support.”
Mr Hollinrake, said “It is unacceptable that four years after the criminal convictions, we are still fighting tooth and nail to get justice for victims.”
An FCA spokesperson said: “We always welcome information in relation to senior manager conduct. We thank Mr Hollinrake for his letter and will reply shortly. We are unable to comment further on this.”