Farepak customers to get financial hamper

07-11-2006

Farepak customers to get financial hamper
Customers left out of pocket by the collapse of Christmas hamper company Farepak are to benefit from a goodwill fund, the government has said today.

Speaking after a parliamentary debate on the issue, trade minister Ian McCartney said that an emergency fund will be set up to help the estimated 150,000 customers affected by the company's collapse last month.

Farepak operated a scheme whereby customers set aside money in a saving scheme for Christmas hampers. Those savers have been told they will not get their hampers this year and have been advised that they will not get their money back.

Mr McCartney today revealed that the Farepak Response Fund was to be set up in conjunction with the charity Family Fund, which is government-funded and is said to have given out £27 million to 46,000 families with disabled children so far this year.

During the debate, businesses were urged to use their corporate social responsibility budgets and contribute to the fund in "the spirit of Christmas".

Supermarkets Sainsbury's and Tesco have already announced they will contribute, with Mr McCartney saying that the latter had promised to donate £250,000 to the fund.

Sainsbury's had earlier said that its customers on the Farepak scheme would be entitled to 25 per cent discounts.

"While Sainsbury's has no involvement with Farepak and its operation, we now know that many of Farepak's customers had planned to use their savings to buy Sainsbury's vouchers," a statement from the supermarket said.

"We hope that through this goodwill gesture we have been able to give these customers that opportunity, and we have gone some way to mitigating this difficult situation."

MPs were also invited to contribute a day's salary to the fund, something which Conservative MP David Mundell has agreed to do.

"It is encouraging that already a number of large retailers have agreed to make a contribution," the MP for Dumfriesshire, Clydesdale and Tweeddale said.

"Individuals will also be able to contribute and that’s why I am accepting the minister’s challenge and will myself contribute a day’s salary to the fund. I am not keen on gesture politics but I do feel so very sorry for everyone who has lost out so cruelly in the Farepak collapse."

The Department for Trade and Industry (DTI) is investigating the collapse of the firm and has been urged by Tory shadow trade and industry secretary Alan Duncan to focus on Farepak's parent company, European Home Retail (HER).

"The DTI inquiry must focus on EHR far more than on Farepak. At first sight it is EHR who have been the problem, not Farepak," Mr Duncan said.

"The inquiry must look at the financial decisions made by EHR and must investigate the conduct of all its directors who seem to have sucked a perfectly viable company, whose customers are some of society's most vulnerable, into their own vortex of failure."

Farepak closed on October 13th and its parent called in the receivers on the same day.


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