Farepak debate to highlight fund

Farepak customers have been fighting to win compensation

MSPs at Holyrood are being asked to donate a day's pay to families affected by the collapse of Christmas savings company Farepak.

Labour MSP Elaine Murray has submitted a motion to the Scottish Parliament to highlight the Farepak Response Fund.

She also criticised Halifax Bank of Scotland (HBOS), who some claim are behind the collapse, for contributing "a paltry" £2m to the fund.

The issue is set to be debated by the parliament next Wednesday.

More than 150,000 customers lost an average of £400 each when the company went into administration in October.

On holiday

Dr Murray, MSP for Dumfries, has been inundated with letters from constituents affected by the collapse.

She has also asked for Sir Clive Thompson - chairman of European Home Retail (EHR), which owns Farepak - to make a contribution.

He is understood to currently be on holiday.

Sir Clive and Farepak Managing Director Nick Gilodi-Johnson said HBOS was to blame for the collapse. The bank denies this.

HBOS provided an overdraft facility to EHR and the decision not to extend the overdraft eventually led to administrators being called in.

These are hard working, prudent people who do not know how to explain to their children that Santa won't be coming this year Labour MSP Elaine Murray Q&A: Farepak collapse

Dr Murray said she hoped the debate would raise the profile of the Farepak Response Fund.

She said: "Like many colleagues, I have been contacted by constituents - mainly women in part time or low paid employment - who invested with Farepak with the purpose of saving to provide their children and grandchildren with a decent Christmas.

"These are hard working, prudent people, who prefer to save rather than take out a loan or use a credit card, who do not know how to explain to their children that Santa won't be coming this year."

The response fund is to be distributed between Farepak customers in time for Christmas.

It is estimated that they have lost a total of between £60m and £80m.

Into administration

Swindon-based Farepak went into administration and ceased trading in October without offering compensation.

Some customers lost as much as £2,000.

Earlier this week, Mr Gilodi-Johnson apologised for the collapse.

On Monday, Jim Devine, the MP for Livingston, asked the Commons Scottish Affairs Committee to question Sir Clive and HBOS over the company's demise.

The Department of Trade and Industry has launched an investigation into what happened at Farepak.