Farepak customers to receive half of money owed

Farepak sign Farepak had run a Christmas club and hamper business since 1968 before its collapse in 2006

Related Stories

Customers and agents of Farepak, the Christmas savings firm, will ultimately receive half of the money they lost when the company collapsed.

Swindon-based Farepak collapsed in 2006, leaving 114,000 people with total losses of £37m.

Now liquidators BDO have confirmed that final payments will be made to those who lost out at the end of August.

Customers have waited for the end of court cases to see a final settlement reached.

'Hardball' attitude

The government's Insolvency Service had argued that the high-profile collapse of Farepak had been the fault of nine former directors of the company.

At a recent High Court hearing, the service had to admit that its case did not stand up, and the action was dropped.

However, the judge argued that HBOS bank had taken a "hardball" attitude in dealing with the company and was partially to blame for the collapse.

Start Quote

Never in my wildest imagination did I think we would get back 50p in the pound”

End Quote Suzy Hall Unfairpak campaign group

This led to Lloyds Banking Group, which now owns HBOS, to make an £8m payment to the Farepak compensation fund.

Total payment

This has allowed the joint liquidators to bring their investigations to an end, and finalise payment levels.

Farepak collapsed leaving no money available to creditors. However, BDO has confirmed that a payment of about 32p in the pound will be made, which includes a share of the £8m from Lloyds Banking Group.

When added to the 17.5p in the pound given by the Farepak Response Fund charity, set up by the government in 2006, customers will have received a total of approximately 50p in the pound, BDO said.

Former customers and agents who have changed their address since they made their original claim should inform the Farepak claims management team of the alteration.

Suzy Hall, who co-ordinated the Unfairpak campaign, a group set up to support victims in the wake of the crisis, said she was delighted with the final figure, describing it as a "fantastic result".

"Never in my wildest imagination did I think we would get back 50p in the pound. Unfairpak believe we have won."

She also praised the liquidators, who have waived some of their fees and been "very mindful" of costs.

"The demographic of Farepak savers is low-income women so this is absolutely wonderful," she said.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • The OfficeIn pictures

    Fifty landmark shows from 50 years of BBC Two


  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa


  • Worcestershire flagFlying the flag

    Preserving the identities of England's counties


  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health


  • Two women in  JohanesburgYour pictures

    Readers' photos on the theme of South Africa


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.