Play fair with the Farepak losers says MP

VICTIMS of the Farepak collapse five years ago are a special case and Government should step in and help compensate them, an MP has urged.

Farepak, which allowed people to spread the cost of Christmas food and presents, went bust in October 2006, with customers losing an average of £400.

Victims are expected to receive around £5.53 million in compensation — but the fees for dealing with the administration have exceeded any potential compensation.

Administrator BDO said the cost to-date of winding up the company stands at £8.2m. This includes BDO’s own fees as well as those of insurers and PR executives.

Oldham West and Royton MP Michael Meacher said that if the Government could not bring the situation to an end, it should look at compensating people as this would cost relatively little and it would create a lot of good will.

Mr Meacher said: “It is now five years since Farepak happened and people have not got the compensation they deserve. What has happened to these people who avidly saved for their Christmas leaves a bitter taste in the mouth. I think this is a special case.”

An estimated 150,000 people across the country lost out, including hundreds of Oldham families who had made regular payments into the scheme.

Mr Meacher is backing a parliamentary campaign to ensure customers are compensated and for the coalition to consider stricter regulation for the prepayment industry.