Farepak savers to get back 'just £20'

17-11-2006

Farepak savers to get back 'just £20'
Customers of the collapsed Christmas savings club Farepak are to receive just four to five pence for every pound they invested in the scheme, according to press reports.

The news follows a meeting between the company's administrators BDO Stoy Hayward and the Unfairpak campaign group, which is acting on behalf of savers.

According to reports, administrators have ruled that there is not enough cash available following Farepak's collapse to reimburse its customers with any more money, meaning that a saver who put away an average of £400 with the festive hamper company will receive back just £20.

"It's better than nothing, but such a small amount when you think about what they saved," Farepak campaigner Suzy Hall was quoted as saying by the Mirror newspaper.

News that Farepak customers are unlikely to receive much Christmas cheer after being left out of pocket following the firm's collapse last month comes after the company's managing director apologised earlier this week for the debacle.

Nick Gilodi-Johnson, whose father founded the Swindon-based hamper firm, said that his family were "very sorry" for the situation that had arisen and were "devastated" by the impact that it had had on families who had lost money through the savings scheme.

However, Farepak chairman Sir Clive Thompson was slammed by MPs yesterday following reports that the company had sent letters to its customers urging them to continue making payments into the scheme, despite being aware of the financial problems of its parent company, European Home Retail (EHR).

Calling for a parliamentary debate over the scandal, Labour MP for Livingstone, Jim Devine told the House of Commons: "On the 'Today' programme on Monday, Sir Clive Thompson said that the company was negotiating a rescue package with the Halifax Bank of Scotland in March.

"At the same time, Farepak was sending out letters to my constituents telling them that they were going to have the best Christmas ever."
Responding, Commons leader Jack Straw described Mr Thompson's comments as "shameless".

"It appears that Farepak and its directors, including Clive Thompson, were well aware of the difficulties that the company faced at precisely the same time as they were encouraging many more people, including some of the poorest in the land, to continue to pay their contributions towards the Farepak hampers," Mr Straw agreed.

The Department for Trade and Industry (DTI) has launched an investigation into the collapse of Farepak amid a contentious debate about who is responsible for savers having lost the money that they invested in the company's hamper scheme.



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