CAMPAIGNERS who battled to secure payment for thousands of Farepak members who lost £37 million when a Christmas club scheme went bust have hailed a victory after hearing they would get around half their money back.
The announcement ends a six-year fight for compensation, which affected more than 116,400 creditors and savers, including 25,000 in Scotland. Most of the low-income members of the scheme lost around £400 when the scheme collapsed in 2006 but some had put away up to £2000.
Liquidators BDO said dividend payments totalling 50p in the pound will be made at the end of next month. This breaks down to about 32p in the pound – which includes the £8m from Lloyds Banking Group announced last week – plus 17.5p from the Farepak Response Fund charity set up by the Government in 2006.
Suzy Hall, of Edinburgh, the national co-ordinator for campaign group Unfairpak, said: "We started in 2006 with zero. To be able to pay out an extra 32p is a fantastic result.
"Never in my wildest imagination did I think we would get back 50p in the pound."
Ms Hall commended the work of the liquidators, who waived some of their fees and been "very mindful" of costs.
She is due to meet Business Secretary Vince Cable tomorrow and will demand the HBOS managers charged with trying to save Farepak face a parliamentary committee to be accountable for their decisions.
The Insolvency Service had earlier been forced to abandon its six-year investigation into Farepak's directors after evidence showed HBOS – now part of Lloyds – twice refused to protect £4m of savers' cash by placing it into a trust.
When the firm collapsed into administration in 2006, the cash was used to repay the bank's £31m loan rather than refund to Farepak customers.
Ms Hall said: "It is ironic that Farepak could have been saved with just £3m to £5m and now Lloyds has paid out £8m. It was pure greed at the time on the part of HBOS who just wanted its loan back."
Trish Nicoll, 46, of Livingston – a paediatric nurse and former Farepark agent – lost about £600 of her own money in 2006.
She said: "I am pleased but no amount of money will repay the emotional stress and worry people were put through. It was absolutely soul destroying."
Mike Weir, the SNP's Westminster spokesman on consumer affairs, has criticised the length of time it took to resolve the Farepak fallout, after it emerged more than 200 members died without being compensated.
He said: "The money is better than might have been expected but they have waited six years and they are getting it chiefly because HBOS has been shamed into making a payment.
"When you look at the amount creamed off in fees and what it cost for the aborted court case, they really should have got a lot more."
Ms Hall, who sat on the liquidation board, defended the work of BDO and said it had gone "over and above" what was required. Campaigners secured a 10% discount on fees and the liquidators waived charges for work relating to the Lloyds payment.
The firm also took on former employees of Farepak and their contractors following the collapse.
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