Victims of HBOS reading fraud offered £3 million in compensation

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LONDON — Victims of one of Britain’s biggest historic bank frauds are being offered a £3 million ($3.66 million) compensation package, a source familiar with the matter told Reuters on Monday.

Halifax Bank of Scotland (HBOS), later bought out by Lloyds Banking Group, was involved in a major fraud that led to the jailing of six people, including two former HBOS bankers, in 2017 for a total of 47 years.

Sources said around 200 people who run companies affected by the scam will be proposed by a panel led by former High Court judge David Fawcett if they are found to have suffered financial losses as a result of the scam.

Eligible business owners have the option to accept the package rather than participate in a re-examination of their cases, which could further lengthen the wait for compensation.

If all are found eligible and the bids accepted, it could result in a compensation bill of around £600m for Lloyds.

The potential payouts show how Lloyds is still grappling with the wrongdoing stemming from the build-up to the 2008 financial crisis, years after most of its peers largely moved on.

The lender originally set up a compensation scheme in 2017, but has been repeatedly criticized by lawmakers and victims for the speed of the process and the amount offered.

Sky News first reported on the offer of compensation.

A spokesman for the Fosket body said: “The body will issue its announcement regarding the agreed package of measures to customers in the next few days.”

A Lloyds spokesman said: “We deeply regret all customers who have been affected by the crimes committed at HBOS Reading and it has always been our intention to provide fair and generous compensation to those affected by the fraud.

“We are working with Sir David Fawcett and his panel, along with other stakeholders, as the panel considers how to accelerate progress in evaluating client cases.”

($1 = 0.8196 pounds)

source

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