Sky News reports that Lloyds has written to 191 fraud victims this week to inform them that the bank was extending the scope of its debt-write offs.

The expansion of the scope of the right off falls in line with the recommendation of an independent review published last month.

This move is the latest made by Lloyds in an attempt to mark the end of a decade-old scandal which saw dozens of small businesses fall into financial ruin because of the scam.

In December last year, Sir Ross Cranson said that the bank’s system for dealing with the repercussions of the scam had “serious shortcomings”.
The bank responded by saying it was “committed to implementing Sir Ross’s recommendations in full in order to put this right for customers”.

Last month, Lloyds said that it would issue a £35,000 one-off payment to each of the 191 victims, costing the bank just under £7 million.

In a letter to the victims of the scam, seen by Sky News, Jo Harris, Lloyds Bank’s managing director, said its original approach had “unintentionally caused us to treat participants who were in the Customer Review inconsistently”.

Ms Harris said that Lloyds was now “extending the scope of the debt write-off measure introduced in the Customer Review to include customers who had either repaid their debts to HBOS or had refinanced their debts with another financial institution prior to the commencement of the Customer Review”.

Lloyds Banking Group has already paid out over £100m in redress under its original scheme.

It is expected that this figure will increase drastically as a result of a reassessment of direct and consequential losses suffered by victims of the HBOS fraud.