Lloyds Banking Group (LBG) has confirmed it will now review the cases of those customers who have been affected by a fraud perpetuated by former HBOS employees.
The gang were convicted in connection with a loans scam and former senior manager Lynden Scourfield was jailed for more than 11 years last week.
Since news of the scandal broke, HBOS has faced accusations that it took too long to react after victims of the scheme made complaints and the company is now under pressure to pay compensation to those who lost out.
“Customer cases will be considered afresh in light of all relevant evidence including new evidence that emerged during the trial,” said Lloyds, which finalised a takeover of the bank eight years ago.
“Since the investigation began in 2010, it was important that the group did not do or say anything that could subsequently prejudice the trial.
“The group deeply regrets that the criminal actions have caused such distress for a number of HBOS business customers.”
While an independent third party has been tasked with investigating the full scale of the scam, it has been estimated that the total cost of the activity could be close to £1billion.
Some of the victims lost their companies and even their homes as a result of the fraud.
Joanne Dove, a member of the HBOS Reading Action Group, lost millions of pounds through her nappy service firm.
“A number of us have already started actions against the bank and that will continue,” she told the BBC.
“It would have been far better for the bank to admit a fraud had occurred, accept responsibility and then negotiate with the victims rather than appoint a needless third party consultant which will incur more expense, borne by LBG’s shareholders and will possibly lead to extensive delays in agreeing compensation.”
Seamus Smyth, Carter Lemon Camerons’ head of litigation and arbitration, said: “The case illustrates the dangers that can lie dormant in any takeover, especially for banks.
“It should also be noted that, if a problem does arise, it is almost always preferable to act sooner, rather than later.”
Carter Lemon Camerons LLP Solicitors is a City law firm with experience in providing advice in actions against financial institutions. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. For more information about our pensions fraud services, please contact Seamus Smyth or telephone: 020 7406 1000.