U.K. financial institution Lloyds was criticized by lawmakers Monday (July 30) over its program to compensate small business victims of fraud related to the bank’s HBOS unit.
Reports in Reuters said a group of lawmakers sent a letter, signed by All Party Parliamentary Group for Fair Business Banking chair Kevin Hollinrake, to Lloyds’ board as well as to the Financial Conduct Authority. The letter accuses the FI of “victim blaming” and highlights the small business compensation program’s “unfairness.”
“We have no trust in such an opaque process,” Hollinrake wrote. “The arrogance of this approach can no longer be countenanced.”
According to reports, criticism has mounted in recent weeks over how Lloyds is handling revelations that HBOS Reading targeted small businesses by imposing debt on them and stripping their assets when they were unable to pay. The scam has been called one of the worst banking scandals in U.K. history and has led six people to jail for their part in the scheme.
Lloyds acquired HBOS in 2009, after the fraud had occurred.
Lloyds first began exploring compensation for the fraud victims last year, when the FI hired Professor Russell Griggs to lead an independent review of how the bank could approach redress.
“We are at a point where, once again, there are a large group of aggrieved business people who have lost their livelihoods,” said MP George Kerevan in a letter to Lloyds in March 2017.“Critically, many have endured years of financial duress and personal stress.”
Separately, Lloyds was hit with a recent glitch that prevented the bank from facilitating fund transfers. The outage, which occurred earlier this month, also affected Halifax and was linked to the U.K.’s Faster Payments service, which itself struggled with an outage earlier in the month.
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