The Collapse Of The “Farepak Savings Club”

I have been most disturbed by the plight of Farepak customers who have spent this year saving to pay for the cost of Christmas only to find that their money has been lost.  The loss of this money is critical and it is a loss that they simply cannot afford.  We must therefore do all that we can to offer help and support to Farepak’s customers and to the agents who are also victims of the company’s collapse.  

The UK hamper industry is self-regulated by the Hamper Industry Trade Association (HITA), of which Farepak is a member.  HITA’s code of practice obliges members to submit annual accounts so that their finances may be monitored in the interests of that member’s customers and agents.  It is clearly important that this requirement was satisfied in the case of Farepak and that the regulatory framework is working properly to ensure that this kind of situation cannot be repeated.  I have written seeking assurances on these matters to the Secretary of State for Trade and Industry, and copied my letter to the Secretary of State for Communities and Local Government and the Economic Secretary to the Treasury.

I have also written to BDO Stoy Hayward who have been appointed as administrators to Farepak. I have asked them to advise me on the position of Farepak’s Welsh customers; the likelihood of some of their money being returned to them and the timescale which may be involved. The administrators have indicated that this information will not be available until next week, at the earliest.

The Association of British Credit Unions (ABCUL) issued a statement on 17 October urging anyone affected by Farepak’s collapse to contact their local credit union. My officials have been in direct contact with ABCUL’s Wales Director who confirmed that many credit unions in Wales are able to offer instant loans at affordable rates which in conjunction with credit union savings accounts can enable those affected to have the Christmas they planned this year and in subsequent years.

The Wales Co-operative Centre in partnership with the Wales Council for Voluntary Action (WCVA) has established a free helpline number 0808 145 4550 which will provide information on and contact details for local credit unions. This information is also available on Wales Co-operative Centre’s website at www.walescoop.com.

Citizens Advice has also been active in ensuring help and support is available to Farepak’s customers. Citizen Advice Cymru have confirmed that specific information on dealing with customers of Farepak has been added to their Advisernet information system which is used by all CAB offices in providing debt advice to clients.  The Citizens Advice public website www.adviceguide.com has a specific page covering Farepack on their "What's New" section in both English and Welsh which should be accessed under the Wales pages of their website for customers in Wales.

The role of the voluntary sector in assisting individuals within their own localities must not be under-estimated. Local county voluntary councils (CVCs) and volunteer bureaux can provide a signposting service to local voluntary sector organisations which may be able to provide practical help and support to those affected by the collapse of Farepak. I have written to all CVCs to urge them to help in any way they can. For information on Wales’ CVCs contact WCVA on 0870 607 1777 or at www.wcva.org.uk.

Many of Farepak’s Welsh customers live in economically and socially deprived areas, such as those included in the Communities First programme and I have written to Community First Partnerships to re-iterate the vital role they have to play to help people in their communities who have been affected. The UK Government is in discussions with members of the British Retail Consortium about the possibility of putting together a package for the families who have had their Christmas plans shattered.

In the meantime I ask all AMs to urge constituents who may have been affected to submit claims for the loss of their savings to the administrators as soon as possible and to consult their local Citizens Advice Bureau and credit union for further help and advice.