Farepak: no justice for savers

THOUSANDS of savers who lost money in the Farepak scandal have been cheated out of justice following the collapse of a high-profile court case against the directors.

Hundreds of Oldhamers were affected when the company, which took weekly savings from customers in return for a hamper at Christmas, went bankrupt in October 2006, taking £40 million of savers’ money with it.

In court it was revealed that when the firm went into administration, cash was used to repay the company’s £31 million bank loan rather than returning money to customers. It was also revealed bankers HBOS had twice refused to protect £4 million saved by customers — people mainly on low incomes — to buy hampers. HBOS turned down the option of placing the money in a trust, leading the Insolvency Service to abandon its five year investigation.

More than 150,000 customers lost an average £400.




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