B2B Payments

UK Regs Reopen Lloyds, HBOS SME Fraud Probe

Shutterstock

The U.K.’s Financial Conduct Authority (FCA) announced it is reopening an inquiry into Lloyds’ HBOS scandal as the bank revealed plans to set aside $124 million for small businesses impacted by the matter, reports said Friday (April 7).

That’s in addition to the $285 million Lloyds had already set aside to cover rising costs surrounding the issue, which stems from fraud and unfair fees on small business customers of HBOS before Lloyds acquired the company in 2009. Earlier this year, six people — two who had worked for HBOS — were jailed for participation in the scandal.

The $124 million now being set aside by Lloyds will be used to compensate SMEs impacted by the scandal, reports said.

“As I have stated before, we would like to express our deep regret and apologies to any customers directly affected by the criminal behavior of these individuals,” said Lloyds Banking Group Chief Executive António Horta-Osório in a statement. “We are absolutely determined that victims of the crimes committed at HBOS Reading are fairly, swiftly and appropriately compensated. We take responsibility for putting right the wrongs that were committed at HBOS Reading at the time.”

Lloyds added that, for the small businesses forced into insolvency as a result of the fraudulent activity at HBOS, it would provide immediate payments on a case-by-case basis. Some will also be helped with daily living costs and legal fees and see existing debts written off, reports said.

The FCA said it would reopen its investigation into the matter after suspending the inquiry in 2013 as the Thames Valley Police conducted its own investigation.

“The public deserves to know the full truth about this and other HBOS failures,” said Treasury Committee Chair Andrew Tyrie in reaction to the FCA’s news. “That this is taking so long is regrettable but understandable.”

Last month Lloyds announced it would hire Professor Russell Griggs, an expert in bank reviews, to lead the independent review of the case for Lloyds.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

Click to comment

TRENDING RIGHT NOW

To Top