Farepak – What Can I Do?
I have been contacted by a number of constituents asking for information on what help is available to those affected by the scheme’s collapse and what action is being taken to investigate the company. As such I have produced a short guide on Farepak, which I enclose. It includes information on the Farepak Response Fund. I have followed the suggestion of ministers and donated one day’s salary to the fund. Please distribute it to anyone affected if you think it might be helpful. More copies can be sent from my office if necessary.
What has happened?
Three weeks ago it was announced that Farepak, the Christmas hamper scheme, had collapsed. This has led to tens of thousands of predominantly low income families losing significant savings for this Christmas, and is a devastating blow to those families at this time.
I had money invested in Farepak: what can I do?
It is very important that customers make a claim with the Administrator.
Contact details for creditors are: tel 0870 830 6010, fax 01793 606 057.
E-mail customer.claims@farepak.co.uk
Information on making a claim is posted by the administrators at www.farepak.co.uk
Will I get my hampers/vouchers/gifts and if so, when?
Farepak is unable to deliver any orders for hampers/vouchers or gifts.
Will I get my money back and if so when and how much?
The administrators are working to realise the assets of the Company. You will have a claim against the Farepak and the administrators will be writing to you about this as soon as possible. Claims can be submitted by agents and customers. Present information indicates that customers will not receive a refund of the payments made, other than possibly a small dividend and it may be some months before this can be paid.
I have collected money from my customers but not yet paid it in. What should I do?
Farepak is no longer accepting money from its customers and it should be returned to your customers and their payment book signed to show the money has been returned.
I ordered my hamper with Provident. Will I still lose money?
The company, unlike others, had not passed on the money it had collected from savers to the collapsed company. Provident customers will receive a full refund of any amounts you have paid towards your hamper. If you contact your agent they will reimburse you with the full amount of payments you have made to Provident for your hamper so far. If you have any queries speak to your agent or contact Provident on 0800 218 2720.
What is help is available?
The Farepak Response Fund (FRF) is an independent charity being set up to administer a scheme to provide relief to families affected by the collapse of Farepak. The Farepak Response Fund will operate on a temporary basis.
Over the coming weeks the Farepak Response Fund will deal directly with Farepak agents. Goodwill payments, in the form of vouchers, will be distributed directly to those agents by no later than the 18th December 2006.
There is no need for agents or individual customers to contact or register with the Farepak Response Fund. They will contact agents directly.
How much is the Farepak Response Fund likely to raise?
So far just over £4m has been donated to the Farepak Response Fund. £41m is estimated to have been lost in Farepak’s collapse.
What action is being taken against the company?
An investigation of Farepak under the Companies Act 1985 is now under way. Officials from the Department of Trade and Industry are now looking through the company’s records, alongside the administrators.
There a number of very serious allegations being made about the conduct of Farepak and companies closely linked to it. All these matters are now being dealt with by the investigation.
What can my MP do about the collapse of the scheme?
I am pressing the Government to do all it can to help those affected by the collapse of Farepak and also to put safeguards in place so that this situation does not happen again. I also want to see strong action taken against directors of the company if they are found to have acted irresponsibly.
It helps me to know of those who have been affected by the collapse of Farepak, so that I can put the case across strongly on behalf of those people. Please get in touch with me if you have been lost money, on 0113 231 0258, e-mail johnbattle@leedswest.freeserve.co.uk, or write to me at Unit 31, Whingate Business Park, Whingate, LS12 3AT.
I need to borrow money to pay for Christmas – where can I go?
Help is available from Leeds City Credit Union.
LCCU provides easy savings schemes for all sorts of needs, including Christmas, and also provide affordable loans with no early repayment penalties. So if Farepak customers receive some of their money back, borrowers will only pay the interest for the amount of time they’ve had the money.
Leeds City Credit Union is able to provide emergency loans to help with the coming Christmas season. This is a much better option than turning to high interest lenders or loan sharks. They can be contacted on 0113 214 5252 or at http://www.leedscitycreditunion.co.uk/.
Is there a safe way of saving for next year?
In the Farepak scheme because the money is deposited to pay for goods (i.e. vouchers or hampers) Farepak does not have to be authorised by the Financial Services Authority as a deposit taker and so does not come under the umbrella of the Financial Services Compensation Scheme (FSCS). Leeds City Credit Union, which is authorised and regulated by the Financial Services
Authority, also has a Christmas Club into which people can save and they receive a 3% return on their savings. It is ‘safe and secure’ as all deposits are covered by the FSCS.
LCCU offers the Argos ACard scheme, which lets their members load money from savings or a loan onto a card, which attracts a five percent bonus, paid for by Argos. This can be spent at any branch of Argos or Homebase. People can save and repay their loans at convenient local branches (there are 7 across the city), or by payroll direct from their wages. In addition people can have their benefits paid directly into a credit union account.