Lloyds Bank has this week agreed that upon completion of a report into the so-called Reading Scandal, it will be disclosed to the Treasury Select Committee.
In a mirror of the Royal Bank of Scotland’s Global Restructuring Group scandal between 2002 and 2007, HBOS business customers were transferred to the regional headquarters in Reading under the pretence that they required assistance from a turnaround division. According to reports by the BBC, this could be prompted even in instances where no payments had been missed and there were no signs of company distress.
Once there, the customers would be referred to Quayside Corporate Services, a company owned by friends of the bank’s Head of Impaired Assets Division, Lynden Scourfield. Quayside would then submit requests for further finances from the bank which would be promptly agreed by Scourfield, leaving customers with more borrowings than they could handle alongside fees for the service. As customers began to fail, Quayside would purchase assets at reduced prices and sell the business onto their other business contacts.
When the bank was bought by Lloyds in 2009, it alleged that rather than disclosing the actions of Scourfield and Quayside, they engaged in a large-scale cover-up operation. Lloyds has since appointed retired High Court Judge, Dame Linda Dobbs, to conduct a full review of the situation and determine how much senior bosses knew about the conduct.
The report is expected to be completed in the second half of 2019 though has already drawn criticism. The main concern voiced by those involved relates to the fact that the report has been commissioned and paid for by Lloyds. As is often the case in these circumstances, this naturally raises concerns over how much evidence will actually be made available to Dame Linda and how reflective of the full case the final report will be.
The recent announcement that the report will be provided to the Treasury Select Committee should allay some of these fears. This should be especially true given that The Telegraph observes that “the Treasury committee has a track record of publishing explosive reports deemed to be in the public interest”.
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