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| Call for hamper schemes safeguard | Call for hamper schemes safeguard |
| (10 minutes later) | |
| Money paid into Christmas savings schemes, such as the failed Farepak hamper business, should be protected says a government review. | Money paid into Christmas savings schemes, such as the failed Farepak hamper business, should be protected says a government review. |
| The review says the government should consider a campaign to publicise different ways of saving for Christmas. | The review says the government should consider a campaign to publicise different ways of saving for Christmas. |
| However, it also points out that hamper and voucher schemes are often a convenient way of saving and avoiding going into debt. | However, it also points out that hamper and voucher schemes are often a convenient way of saving and avoiding going into debt. |
| About 150,000 people lost an average of £400 when Farepak failed last year. | About 150,000 people lost an average of £400 when Farepak failed last year. |
| "It is clear that many people, particularly those on low incomes, have valued the kind of scheme run by hamper companies because they have provided a convenient and disciplined way of saving for Christmas and helped keep them out of debt," said the report's author Brian Pomery, chairman of the Financial Inclusion Taskforce. | |
| "However it is essential that money paid in advance to the companies that run such schemes is protected; arrangements need to be put in place urgently to secure this. | |
| "It is also important to ensure that what the schemes provide is competitive and represents good value for money," he added. | |
| Farepak | |
| Mr Pomeroy's report does not look at the reasons for the collapse of Farepak or suggest ways for regulating hamper and voucher schemes. | |
| These issues are being examined by the Department for Trade and Industry and the Office of Fair Trading. | |
| Farepak's administrators, BDO Stoy Hayward, concluded recently that the collapse of the business was caused by the fact that £33m it lent to its parent company, European Home Retail, was not paid back. | Farepak's administrators, BDO Stoy Hayward, concluded recently that the collapse of the business was caused by the fact that £33m it lent to its parent company, European Home Retail, was not paid back. |
| But in the light of the company's collapse the government wanted to know who saves with these schemes, why they use them, and if conventional savings organisations could offer a better deal. | |
| As well as calling for customers' money to be ring-fenced, the report also suggests that: | |