Government probes Farepak collapseChristmas cancelled for thousands of families

25 October 2006

 

A Christmas giftwrap

The government is investigating the collapse of Christmas hamper firm Farepak.

Trade Secretary Alistair Darling said it was a ‘matter of great concern' that thousands of families had lost money when the company went into administration earlier this month.

Swindon-based Farepak ran a savings scheme in which 150,000 customers had put money aside for vouchers and Christmas hampers.

But after the company went under, administrators announced that no orders would be fulfilled.

Trade and industry committee

Speaking before the Trade and Industry Select Committee, Alistair Darling revealed: ‘We do not normally announce investigations, but because this company is in administration I can tell the committee that this morning, officers from the Companies Investigation Branch have started an investigation under the Companies Act 1985.’

Investigators can recommend that the government take legal action against the company itself or anyone involved in running it.

But a Department of Trade and Industry spokeswoman stressed that the investigation should not be seen as an indication that the government believes fraud was behind Farepak's collapse.

Goodwill

The British Retail Consortium (BRC) is trying to come up with a scheme to give ‘a goodwill gesture’ to families who lost out in the Farepak collapse.

A BRC spokesman said: ‘At this stage our retail members are unable to make specific commitments but this would be a goodwill gesture not a compensation scheme.

‘The BRC is gathering more information, on the numbers of customers affected, the types of products and services that have been ordered, customer records and other relevant information.

‘The BRC is also exploring, with the DTI and the administrators of Farepak, how to target affected customers to ensure any support reaches them.’