Farepack victims submit claims for £39m
More than 113,000 victims and agents of the British Farepak Christmas savings-club collapse have put in claims totalling £39m (€59.5m), a report by administrators said today.
BDO Stoy Hayward said the total was expected to rise further, with claims coming in on a daily basis.
Victims of the collapsed firm will receive just 4p to 5p for every £1m (€1.53m) lost, according to estimations in the report, sent out to creditors yesterday.
The administrators said savers’ money was clearly not ring-fenced by the firm, which went bust in October last year.
The report said: “It is clear that Farepak did not adequately protect the money paid in.”
Farepak savers and agents left out of pocket are being given the chance to vote on the administrators’ proposals by post.
But a meeting will not take place, as the administrators said they were concerned that agents and customers would have to take time off work and spend money on travel to attend.
A total of 150,000 people are believed to have lost money to the tune of £35m (€53.4m) when the Swindon-based company crashed.
Farepak customers paid in monthly sums to the firm or its agents to receive food hampers for Christmas.
However, they were left with little hope of compensation when the Wiltshire company and its parent European Home Retail went into administration on October 13, after bankers rejected rescue proposals.
The victims lost an average of £400 (€607) each, but will receive compensation of just £16 (€24.4) under the proposed payment packet from the administrators.
Farepak members benefited from a relief fund set up before Christmas, the independent Farepak Response Fund, which raised £6.8m (€10.4m) in donations.
The largest contribution to the fund was £2m (€3m) from Halifax Bank of Scotland.
Late donations to the fund were also used to buy hampers from the administrators, with 19,000 sent out to victims in time for Christmas.
