Economy Lawmakers criticise Lloyds compensation scheme for HBOS fraud victims

Lawmakers criticise Lloyds compensation scheme for HBOS fraud victims

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File-A man enters a Lloyds Bank branch in central London, Britain February 25, 2016. Lloyds Banking Group rewarded investors with a surprise 2 billion pound payout on Thursday, underlying its intent to be the biggest dividend payer among Britain’s banks and its recovery after a state bailout.

A group of British lawmakers on Monday wrote to the financial watchdog and the board of Lloyds Banking Group (LLOY.L) accusing the bank of “victim blaming” and “unfairness” in its redress scheme for victims of a fraud at its HBOS Reading division.The letters, signed by lawmaker Kevin Hollinrake, who chairs the All Party Parliamentary Group for Fair Business Banking, said compensation offers the bank had made were insufficient and that victims were being treated with contempt by the bank.

“We have no trust in such an opaque process,” he continued, in his letter to the Lloyds board.

“The arrogance of this approach can no longer be countenanced,” the letter said.

Lloyds did not immediately provide a comment.

Hollinrake’s letter caps weeks of renewed criticism of Lloyds’ handling of the fraud at HBOS Reading, one of Britain’s worst banking scandals that saw six people jailed for a total of 47 years last year.

The fraud targeted small businesses in the bank’s impaired assets division, which were loaded up with unmanageable debt and stripped of their assets when they were unable to pay.

In his letter to the Financial Conduct Authority, Hollinrake called on the regulator to say what powers it had to rectify the problems he had outlined.

He pointed to the senior managers’ regime, which aims to make executives at financial firms more accountable, noting that the group’s concerns “relate not to past misconduct, but current treatment of victims of a proven fraud.”