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Last Updated: Wednesday, 28 March 2007, 05:39 GMT 06:39 UK
Christmas club safeguards planned
Closed gates at Farepak depot
Some people lost as much as 2,000 when Farepak collapsed
Proposals to safeguard customers of Christmas savings clubs are to be announced by the government.

The move comes after more than 150,000 people lost an average of 400 when hamper firm Farepak failed last year.

The government's plan will try to ensure that Christmas savings club cash is ringfenced for customers.

Customers of Farepak are likely to receive back just a few pence for each pound they lost after the company went into administration.

The government's plan has been backed by the biggest remaining Christmas savings club operator, the Park Group.

Farepak's administrators BDO Stoy Hayward said the collapse of the business was triggered by the fact 33m it lent to its parent company European Home Retail was not paid back.

Farepak's collapse is also still being investigated by the government's Companies Investigation Branch.


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