An SNP MP has urged the UK government to help Farepak victims who are still waiting for compensation fully five years after losing savings when the firm went bust.
Work and Pensions spokesperson, Dr Eilidh Whiteford, has issued a Christmas Eve appeal to the UK coalition calling for compensation for families who lost their cash after the collapse of the Christmas saving scheme.
Comparing the UK Government’s response to bailing out the banks with Farepak, Dr Whiteford has written to Business Secretary Vince Cable, asking why 20,000 Scottish customers, who lost their Christmas savings in 2006 are still out of pocket.
Dr Whiteford, MP for Banff and Buchan, said:
“The UK Government bent-over-backwards to bail out the banks, and is rightly compensating customers of Equitable Life but hasn’t found a single penny for the Farepak families.
“It is five years since Farepak collapsed, but that nightmare of Christmas past is still being felt by many low income families. Savers are likely to recover just 5p in the pound, while the final bill for the administrators and their legal advisers has already exceeded £8 million.
“It is simply disgraceful that, years after the company collapsed, customers are still waiting for their money back.
“The UK Government needs to bring forward compensation for these families, particularly given that it was its failure to secure adequate consumer protection through regulation that allowed the Farepak Christmas crisis to happen.
“UK Ministers should step in without further delay to secure compensation for those who lost out so badly.”
The scheme, which went bust in October 2006, saw people make regular payments to agents in order to spread the cost of Christmas food and presents.
The scheme mainly attracted people on low incomes, and a lot of pensioners. About 116,000 people lost almost £37m in total.
One former Farepak agent, Jean McLardy, from West Kilbride in Ayrshire, recalled the moment she learned of the collapse.
Speaking earlier this year she said: “I only found out about it because my sister phoned me,” she added: “It was in the Sunday paper. And having to tell everybody was awful.
“I lost half a stone in weight in three days. Unfortunately my mum has since died, and I don’t know whether I’ll get her money back or not.
“But my mum might not be the only one in that position. There could be lots.
“Three of (my savers) were pensioners.”
In October Farepak victims launched an e-petition calling on the UK Government to fully compensate those who lost their savings.