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Last Updated: Friday, 3 November 2006, 19:11 GMT
Warning over savings clubs 'risk'
Catalogue detail from Farepak website
Farepak will not be delivering hampers this Christmas
The Consumer Council has issued a warning about the risks of savings clubs, following the collapse of the Christmas hamper firm, Farepak.

It is estimated up to 3,000 people in Northern Ireland have lost money after the English company ceased trading.

South Belfast MP Alistair McDonnell, who organised a meeting on the issue, is trying to help those affected.

Eleanor Gill of the Consumer Council said: "Savings clubs such as this are a risky business."

Ms Gill, who is chief executive of the council added: "They did all the right things, they saved their money, they put it aside, and they tried to plan for Christmas and other events. They have lost it all.

"What we are actually doing is handing over money, with no guarantee of getting it back and it works for a lot of people.

Eleanor Gill
Eleanor Gill said there were other ways of saving

"But... that's maybe luck and we need to protect ourselves better in the future and find other ways of saving the money and doing the right thing, but also not having wrong done to us."

Customers paid money monthly to the Swindon-based firm or its agents towards food hampers for the festive season.

The company ceased trading in October and said it was unable to honour its Christmas commitments this year. It is now in the hands of administrators.

The collapse of Farepak, owned by European Home Retail (EHR), is being examined by the company investigations branch of the Department of Trade and Industry.

One Northern Ireland woman, who attended the public meeting in Belfast on Thursday evening, said: "I have been saving with Farepak for about four years now.

"I am on my own with five kids and I promised them things... but I don't know where I am going to get the money to get them.

"They are all still young and I'm just devastated."

Dr McDonnell said he was working along with a number of other MPs whose constituencies are affected, to try to get some of the money returned to people.

"We will work to attempt to get them as much of their money back as possible and perhaps try and generate some sort of a scheme whereby we get them some of the goods, maybe from the big wholesalers," he said.

Electrical goods

"We'll be depending on the charity of big traders to perhaps pass over some things as a gesture of good will."

He said he would be pressing for greater controls for such companies in the future.

Farepak, which also sold TVs, electrical goods and jewellery, employed 35,000 agents across the UK and had been trading since 1969.

Customers' only hope for some sort of recompense is to put in a claim for compensation from any assets that are realised in Farepak.

The British Retail Consortium, which had promised to see if it could come up with a relief package, has said it will not be able to offer any help after all.

In a statement, the consortium said "Farepak's collapse was much more complicated than early media reports suggested" and it had "decided to discontinue its efforts now rather than allow the situation to drag on".


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