Victims of a one billion pound fraud have criticised Lloyds Banking Group for failing to meet its own deadline for paying compensation.
In the wake of guilty verdicts in a fraud trial that ended in February, Lloyds said it would offer compensation to the victims by the end of June.
However, now the deadline has arrived, only a small fraction of the £100m it set aside has so far been paid out.
Lloyds, which bought HBOS in 2009, has yet to comment.
In the HBOS fraud, two corrupt HBOS bankers pressured small business customers into hiring a firm of so-called turnaround consultants called Quayside Corporate Services, led by David Mills.
Mills and his accomplices bribed the bank managers with cash, gifts and prostitutes, then used their relationship with the bank to bully the business owners into handing over exorbitant fees and, eventually, control of their companies. Many business owners were not only ruined but lost their marriages and their health.
Mills and the others, including former HBOS banker Lynden Scourfield, were convicted in January of various charges of fraud, corruption and money laundering between 2003 and 2007.
After years of denying any knowledge of criminality, Lloyds Banking Group came under pressure to take responsibility for crimes committed by its own staff. On 27 April the bank said it would offer victims compensation by the end of June.
However, the victims say the bank’s compensation scheme isn’t impartial. Of the 64 who’ve joined it, it’s understood that fewer than 10 have received offers and only one settlement has been reached. Lloyds has yet to comment.
Dozens more victims have declined to join the scheme amid concern that the bank is seeking to dictate terms, imposing its own compensation scheme rather than consulting them.
The bank is expected to provide an update on its treatment of the victims of the crime later today.
Nigel Morgan, whose family lost millions and was driven into bankruptcy following the fraud, says the bank refused to help him with a modest sum to prepare a compensation claim. He says the bank has made no effort to try to reverse the bankruptcy and the trustee in bankruptcy now wants to control the claim for compensation.
“It’s been 12 years since we were ruined by this and a very tough 12 years. I thought the bank would be decent enough to admit when it was wrong – but the way they’re behaving to the victims is disgusting. The first thing they should have done is to send someone round and apologise unreservedly.
“We’re constantly living on the edge, worried we won’t keep what we have left; I’m having panic attacks every day. It’s just an awful situation.”