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| MPs warn against Farepak repeat | |
| (about 4 hours later) | |
| The collapse of Christmas saving scheme Farepak highlights a "serious lack" of consumer protection, MPs have said. | The collapse of Christmas saving scheme Farepak highlights a "serious lack" of consumer protection, MPs have said. |
| A Treasury Select Committee report urged government action to ensure such situations do not happen in future. | A Treasury Select Committee report urged government action to ensure such situations do not happen in future. |
| MPs want more powers for watchdogs such as the Financial Services Authority (FSA) and Office of Fair Trading (OFT) to safeguard people's money. | MPs want more powers for watchdogs such as the Financial Services Authority (FSA) and Office of Fair Trading (OFT) to safeguard people's money. |
| About 150,000 people are estimated to have lost a total of up to £50m when Farepak collapsed in October. | About 150,000 people are estimated to have lost a total of up to £50m when Farepak collapsed in October. |
| So far the Farepak response fund launched by the government has raised £5.8m from companies and individuals - about 10% of the money lost. | |
| Launching the committee's report on financial exclusion, its chairman John McFall said it was vital to give people confidence that their savings would be protected. | Launching the committee's report on financial exclusion, its chairman John McFall said it was vital to give people confidence that their savings would be protected. |
| Action needed | Action needed |
| He said money paid into schemes like Farepak should be as safe as that deposited into a bank. | He said money paid into schemes like Farepak should be as safe as that deposited into a bank. |
| "The Farepak case has highlighted a serious lack of consumer protection in this area," he said. | "The Farepak case has highlighted a serious lack of consumer protection in this area," he said. |
| I want to see early action... to consider how appropriate safeguards can be introduced John McFallTreasury Select Committee | I want to see early action... to consider how appropriate safeguards can be introduced John McFallTreasury Select Committee |
| "I want to see early action from the government, the OFT and the FSA to consider how appropriate safeguards can be introduced to ensure that such a situation never happens again." | "I want to see early action from the government, the OFT and the FSA to consider how appropriate safeguards can be introduced to ensure that such a situation never happens again." |
| The report says the Farepak case highlights the need for the government to extend its policies on financial exclusion to the areas of savings and insurance. | The report says the Farepak case highlights the need for the government to extend its policies on financial exclusion to the areas of savings and insurance. |
| The committee said it wanted to see evidence of "substantial progress" on consumer protection by the end of January. | The committee said it wanted to see evidence of "substantial progress" on consumer protection by the end of January. |
| 'Complex decisions' | 'Complex decisions' |
| The report also wants more action from the government on educating people about other areas of personal finance, such as debt. | The report also wants more action from the government on educating people about other areas of personal finance, such as debt. |
| FAREPAK HELP 0870 066 9826www.farepakresponsefund.org.uk | FAREPAK HELP 0870 066 9826www.farepakresponsefund.org.uk |
| "There is a need for dramatic improvement if we are to adequately equip young people for the complex financial decisions they will face," said Mr McFall. | "There is a need for dramatic improvement if we are to adequately equip young people for the complex financial decisions they will face," said Mr McFall. |
| Teresa Perchard, director of policy at Citizens Advice, welcomed the committee addressing the Farepak issue. | Teresa Perchard, director of policy at Citizens Advice, welcomed the committee addressing the Farepak issue. |
| "This scandal has forced thousands of families into difficult financial circumstances through no fault of their own and cannot be allowed to happen again," she said. | "This scandal has forced thousands of families into difficult financial circumstances through no fault of their own and cannot be allowed to happen again," she said. |
| I thought it was protected Florence Woods, Farepak saver | I thought it was protected Florence Woods, Farepak saver |
| The FSA had no powers to regulate Farepak so when the firm went under, savers' money was not ring-fenced, he added. | The FSA had no powers to regulate Farepak so when the firm went under, savers' money was not ring-fenced, he added. |
| A rescue fund has raised more than £5m for the victims of the Farepak collapse but one of those affected told the BBC that proper safeguards were needed for savers. | A rescue fund has raised more than £5m for the victims of the Farepak collapse but one of those affected told the BBC that proper safeguards were needed for savers. |
| "I never thought companies like Farepak could lose all of our money in this way," said Florence Woods, who paid £500 to the company. | "I never thought companies like Farepak could lose all of our money in this way," said Florence Woods, who paid £500 to the company. |
| "I thought it was protected." | "I thought it was protected." |