I've just signed another EDM on Farepak:
That this House notes that over a year has passed since the Christmas saving company Farepak collapsed; further notes that the collapse forced many families into the arms of debt lenders who charge extortionate rates of interest; believes that the victims of Farepak are entitled to justice and that those responsible for the Farepak collapse should be held accountable for their actions; notes that many of the innocent victims of the Farepak collapse have not received any compensation; believes that compensation must now be made available; and calls on the Government to introduce legislation to ensure that a Farepak-style collapse cannot happen again and for the Government to publish the report into the collapse of Farepak.
A year ago, I joined many MPs in giving up one day's salary to help victims of Farepak pay for Christmas; I thought it was the least I could do. Not all Bristol MPs felt the same:
http://www.bristolwestlabourparty.org.uk/92f5e18a-4707-7d14-ed9b-0e10bbaf7cce
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12 comments:
I honestly wonder whether MPs think before speaking.
Do MPs read the laws of our land? If so, please read the Companies Act 1985 and the Insolvency Act 1986. Therein it will advise you of the process of administration and liquidation.
Before I am shouted down - I lost through Farepak also but it does not help to continually go on and on about give "them" their 5 pence back before Christmas - the average Farepak customer lost £400 - what is £20 going to do to aid Christmas 2007?
This is ridiculous the amount of MPs crawling out the woodwork jumping on this bandwagon and that is exactly what is happening hear.
The Administrators went into a MESS on 13 October 2007. No proper database. They had to compile a full customer database and then start writing to customers to explain a hugely complex process to them.
Farepak is now in liquidation and the claim process is progressing. Over a 123,000 claims totally almost £38 million. Some duplicate claims. Some claims which should be withdrawn as consumers received charge back via Section 75 of the Consumer Credit Act 1974.
Please, please, please STOP AND THINK about the upset that comments such as these EDM are making to Farepak customers who are the real victims here.
Also can I just add that under the Companies Act 1985 the Special Investigation Branch's Report will NOT be published - it is what our laws say. That is not to say I agree with it but the fact of the matter is it is LAW!
Also regarding legislation. The Ian McCartney instructed the DTI and the insolvency experts who write the laws for the UK to push for the birth of the Christmas Prepayment Association.
The Treasury Select Committee COMMENDED the actions of the members of the CPA and we now have the Post Office who have launched their Christmas Club and have applied for membership to the CPA.
What needs to be looked at are the retailers out there who are NOT regulated.
Whilst I sympathise with Farepak customers, I am astonished by this whole saga! Companies go bust and people loose out, that's life I'm afraid! Why on earth should the governement get involved. I lost several thousand pounds on Energis when they went belly up but it's not the governments fault and there is nobody to blame! Take it on the chin and move on!
Gary I think you should remember that Nothern Rock was also a company yet the government could find upto £40 billion to bail it out, yet it could find nothing for Farepak 'savers'. I am aware of no law which allows the government to give that amount of money to a private company.
The money was basically give to bail out wealthy people with over £30,000 worth of savings who should have know their money was not protected by law.
With Farepak the amounts were relatively small and they would have been protected by law had Farepak been a bank.
Now Farepak was not a bank but the government allows such companies to misleadingly advertise the money given to them by customers as savings without warning them that it is all at risk if the company goes bust.
Thus the government has a moral responsibility to compensate those customers for allowing them to be mislead.
It is quite staggerinig that such companies can still use such misleading advertising.
I am quite sure that if the Northern Rock customers had all had modest savings, as was the case with Farepak, that they would similarly not have received a penny in compensation.
One rule for the rich, one rule for he poor.
Double standards as ever.
Also there are only a handful of directors to be investigated. What is the hold up there?
I guess the government is putting off telling you that the directors did nothing wrong because the government lets them get away with it.
It's gonna need a real big news day for it to bury that story!!
Well Done to all those MP's that supported the "Farepak" Early Day Motion. As a "Farepak" victim myself I'm in full support of this EDM and those MP's that signed. Maybe the law could be changed as a consequence to ensure that the Farepak disgrace can not happen again - minimal or self-regulation of financial companies/institutions is not acceptable.
£20 for a pensioner or someone on low income would be welcome I'm sure but lets go for full compensation just like those savers with "Northern Rock" are guaranteed.
I'm afraid I don't agree with you Brendan. The government has lent money to Northern Rock. It's not a freebie! They lent this money to safeguard the whole UK banking industry and possible kickback that it could have had on the British economy. Failed companies should not be given taxpayers money.
I actually used to work on insolvency cases during my days as a lawyer, including the Leyland Daf receivership/ management buy-out, which was about as complex as they get - huge numbers of suppliers involved, complex retention of title claims, and a lot of litigation. So I do understand the processes, and appreciate why these things take time to resolve. But as politicians our role is to keep the issue in the spotlight; the fact is, many Farepak customers feel that they have been forgotten about, and have written to their MPs to tell them as much. Changes have been introduced since the Farepak collapse which will hopefully prevent a similar situation arising - e.g. putting funds into independent trust accounts, and the new watchdog - but we should be keeping up the pressure until compensation is paid and those responsible for the failure held to account. I know UNISON, amongst others, are calling for the publication of the report, and assumed they'd cleared that with their lawyers, but I will check that out myself.
Kerry, whilst I agree as politicians it has to be kept in the spotlight, I have to state that I completely disagree with some of the comments made by politicians especially regarding publication of the Special Investigation Branch Report. It gives Farepak customers false hopes for as politicians you must be well aware that it shall remain confidential under the Companies Act 1985.
Whilst I do not necessarily agree with the confidentiality, the fact is that the laws of OUR land provide for that confidentiality.
Are you aware that the Report commissioned by UNISON involved the interviewing of 16 Farepak "victims" and the findings on same were from those 16 "victims" out of approximately 150,000!!!!!
In working in receivership/administration cases you obviously realise that these things do take time and instead of politicians saying "we shall push for the liquidators to pay out prior to Christmas.........." would it not be better to tell the TRUTH and say "this is a complex process, the liquidators are working hard, better they do a good, thorough job than a quick, shoddy job........"!!! Also, having worked as a solicitor you will be well aware of the far reaching powers liquidators have compared to that of administrators. Would it not be more prudent to be informing your constituents of the powers of liquidators?
I care passionately about every single person affected by Farepak as do everyone on Unfairpak who have worked their guts off since the start of this debacle. I think it is fair to say that many comments made by politicans are unhelpful to say the very least.
Gary, I agree with you 100% and wish that people (ie Farepak customers) were made aware of the fact that the money which Northern Rock has received is a loan from the Bank of England whose job is to look after the British economy as a whole.
Farepak customers are not being made aware of the difference between Northern Rock and Farepak ie the fact it [Farepak] was a private limited company.
I lost money through Farepak but I still firmly believe that the government should not bail out companies. Had the government compensated Farepak customers they would have set a very dangerous precedent. In fact, it would have been political suicide in my honest opinion.
"Farepak Victims Committee", I am sure that you will be aware of the laws of our land as well and that any breach of the laws ie publication of a confidential report could seriously prejudice any court case to follow thereon! I am sure as a fellow Farepak customer yourself you would never want that to happen!
What needs to be looked at regarding regulation are the prepayment companies that are still out there, still taking money and have no regulation in place whatsoever.
Regarding the Christmas Prepayment Association of which there are currently two members with the Post Office (already regulated by the FSA but still wanting to become a member of the CPA) the trust agreements were drawn up in accordance with the former DTI, insolvency experts within the government (who write the laws of our land), solicitors and a QC.
The Treasury Select Committee commended the work of the members of the CPA but flagged up something very important - retailers who are NOT regulated.
What I found worrying was one lady who had saved with her local butcher all year to get a meat package at Christmas. She had NO IDEA that butcher was not regulated and had he went into administration, she would have lost her money yet again.
I also wish to add one further thing which I believe should be looked at also yet seems to have went quiet - HBOS were able to secure a charge on Farepak Food & Gifts Limited knowing full well that the only form of income of that company was that of savers money! Now albeit not illegal, time and time again myself and Unfairpak have highlighted the morality issue here!
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