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Debt fears for Farepak customers Debt fears for Farepak customers
(about 5 hours later)
Savers who lost money when the Christmas savings firm Farepak collapsed are getting deep into debt.Savers who lost money when the Christmas savings firm Farepak collapsed are getting deep into debt.
The BBC has discovered that some have turned to a doorstep lender which charges very high interest rates.The BBC has discovered that some have turned to a doorstep lender which charges very high interest rates.
In the playground of Southville School in Feltham we found many parents who had lost money after Farepak collapsed.In the playground of Southville School in Feltham we found many parents who had lost money after Farepak collapsed.
Some had borrowed from family but others had taken more desperate steps. One woman told us someone who seemed to be a loan shark had approached her.Some had borrowed from family but others had taken more desperate steps. One woman told us someone who seemed to be a loan shark had approached her.
"He came up to me at the school gate and said: 'Do you need some money?'. I said 'No', and he said 'Well you lost vouchers' and I said 'Well I don't need it off you'", said Lisa Tuckwell."He came up to me at the school gate and said: 'Do you need some money?'. I said 'No', and he said 'Well you lost vouchers' and I said 'Well I don't need it off you'", said Lisa Tuckwell.
Instead she turned to a home credit firm called Shopacheck, which has an agent in the area.Instead she turned to a home credit firm called Shopacheck, which has an agent in the area.
The company offers shopping vouchers, and Lisa took £1,100 worth.The company offers shopping vouchers, and Lisa took £1,100 worth.
The trouble is, from next week she will have to find a weekly payment of £33.The trouble is, from next week she will have to find a weekly payment of £33.
In all, her repayments will total £1,650 and that equates to an Annual Percentage Rate of 143.1%.
'Expensive credit''Expensive credit'
It appears that Shopacheck is also doing good business with other Farepak customers across the country.It appears that Shopacheck is also doing good business with other Farepak customers across the country.
Adele Dunne is a Farepak agent in West Yorkshire, whose customers lost a total of £2,500.Adele Dunne is a Farepak agent in West Yorkshire, whose customers lost a total of £2,500.
She told us that she had borrowed with Shopacheck in the past. "My Shopacheck agent told me that she'd sold £5000 worth of vouchers in a week after Farepak went bust."She told us that she had borrowed with Shopacheck in the past. "My Shopacheck agent told me that she'd sold £5000 worth of vouchers in a week after Farepak went bust."
Gerry Stevens, corporate affairs director at Shopacheck, insisted that his firm was not exploiting Farepak customers or offering them a bad deal.Gerry Stevens, corporate affairs director at Shopacheck, insisted that his firm was not exploiting Farepak customers or offering them a bad deal.
He said his firm dealt with people who had "fluctuating financial circumstances" and did not make them pay penalty charges if they missed a repayment on their vouchers or a loan.He said his firm dealt with people who had "fluctuating financial circumstances" and did not make them pay penalty charges if they missed a repayment on their vouchers or a loan.
"That is not the case with mainstream lenders", he said."That is not the case with mainstream lenders", he said.
'Double scandal''Double scandal'
The Competition Commission is about to unveil a final report on home credit firms.The Competition Commission is about to unveil a final report on home credit firms.
The inquiry followed a complaint from the National Consumer Council (NCC), which said today that the plight of Farepak customers highlighted the need for affordable credit for people on low incomes.The inquiry followed a complaint from the National Consumer Council (NCC), which said today that the plight of Farepak customers highlighted the need for affordable credit for people on low incomes.
"It is a double scandal", said Janice Allen of the NCC."It is a double scandal", said Janice Allen of the NCC.
"The people who saved with Farepak thought they were doing the right thing. Now they find themselves forced onto expensive forms of credit.""The people who saved with Farepak thought they were doing the right thing. Now they find themselves forced onto expensive forms of credit."