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| Boss attacks bank in Farepak row | Boss attacks bank in Farepak row |
| (about 1 hour later) | |
| The chairman of the owners of Christmas savings club Farepak has said its bankers contributed to the collapse. | The chairman of the owners of Christmas savings club Farepak has said its bankers contributed to the collapse. |
| The Swindon-based hamper and voucher firm went into administration in October without offering compensation. | The Swindon-based hamper and voucher firm went into administration in October without offering compensation. |
| Sir Clive Thompson said Halifax Bank of Scotland refused to support Farepak because of a £1.5m funding shortfall, says the Sunday Telegraph. | Sir Clive Thompson said Halifax Bank of Scotland refused to support Farepak because of a £1.5m funding shortfall, says the Sunday Telegraph. |
| An HBOS spokesman said requests to the bank by Farepak directors to "ring fence" savers' money were not serious. | An HBOS spokesman said requests to the bank by Farepak directors to "ring fence" savers' money were not serious. |
| "The fact is that there was no money to ring fence" because the money was used as working capital by European Home Retail (EHR), Farepak's owner, said the spokesman. HBOS is to donate £2m to a fund for Farepak customers. | "The fact is that there was no money to ring fence" because the money was used as working capital by European Home Retail (EHR), Farepak's owner, said the spokesman. HBOS is to donate £2m to a fund for Farepak customers. |
| HBOS provided an overdraft facility to Farepak's owner, EHR. It was an HBOS decision not to extend EHR's overdraft that eventually led to administrators being called in. | HBOS provided an overdraft facility to Farepak's owner, EHR. It was an HBOS decision not to extend EHR's overdraft that eventually led to administrators being called in. |
| The bank had previously come under fire from critics but they had pointed out that it allowed Farepak to continue trading despite its problems. | |
| EHR chairman Sir Clive was quoted by the Telegraph as saying Farepak's management was "hung out to dry" by HBOS. | EHR chairman Sir Clive was quoted by the Telegraph as saying Farepak's management was "hung out to dry" by HBOS. |
| He also said the bank rejected five proposed rescue packages between May and October. | He also said the bank rejected five proposed rescue packages between May and October. |
| An HBOS spokesman told the Sunday Telegraph there was a "world of difference between a proposal and a viable solution". | An HBOS spokesman told the Sunday Telegraph there was a "world of difference between a proposal and a viable solution". |
| Response fund | |
| The Department of Trade and Industry has launched an investigation into what happened at Farepak. | |
| And a fund has being set up to help the thousands of families affected. Customers have lost about £400 each on average, though some have lost closer to £2,000. | |
| HBOS is to donate £2m and Tesco, Marks & Spencer and Morrisons have offered money. | |
| They're not considered financial products so the Financial Services Authority doesn't regulate them Ed Vaizey, Conservative MP | |
| Christmas hamper supplier Park Group is donating £1m of High Street vouchers to the fund and Sainsbury's and John Lewis have agreed that Farepak customers can get 25% of the value of their savings in vouchers for their stores. | |
| Paul Munn, a non-executive director of EHR, told BBC Radio Five Live the board had made "strenuous efforts to address the situation up to the point when it was not capable of being taken forward". | |
| "Clearly, we're very saddened by the situation," he said. | |
| "No-one likes to see any company fail or let its customers down. That's absolutely to be regretted." | |
| Debbie Black, who was both a Farepak agent and customer, said she thought the company bore the ultimate responsibility for the situation. | |
| "At the end of the day we are putting our trust in Farepak and the parent company EHR and our money should have been safeguarded by them - they shouldn't rely on the bank to make safeguards. | |
| "It should be down to the directors of the company to do it anyway." | |
| Meanwhile, Conservative MP Ed Vaizey said he was unhappy about the rules governing clubs such as Farepak. | |
| "They're not considered financial products so the Financial Services Authority doesn't regulate them," he said. | |
| "There's no compulsion on the companies to provide insurance in case the company goes under to help compensate people who suffer as a result." |