Halifax Bank of Scotland (HBOS) is reportedly facing legal action from the directors of eighteen clients of a rogue branch in Reading, Berkshire.
Representatives for each of the involved companies are claiming that the Reading unit of HBOS, which was taken over by Lloyds Banking Group in 2009, coerced clients into using Quayside Corporate Services as an adviser by threatening to withhold further funding if they didn’t.
In the civil lawsuit, it is alleged that the excessive fees charged by Quayside crippled a number of the companies and that some even went into administration.
HBOS is being sued for failing to properly investigate the allegations made against the Reading unit, despite numerous complaints over three years from the directors of the companies. As a financial business, the bank is presumed to have professional indemnity insurance in place to cover claims of negligence such as this.
There has also been a criminal investigation launched by Thames Valley Police, and six people have been arrested so far. More arrests are expected to follow in the New Year. According to reports, lawyers may even pursue a case for fraud as when Quayside was an agent, the bank acted as principal.