Farepak savers payout trebled

Savers who lost money when Farepak, the Christmas savings firm, collapsed into administration four years ago will now receive 15p for every pound they lost, it was revealed today. 

The company’s administrators, BDO Stoy Hayward, have reached an agreement with the group’s directors that means they will pay up to £4m from their own pockets in compensation to the 15,000 customers who subscribed to the scheme. Under the latest settlement anyone who put in £400 would get £60 rather than the £16 previously estimated. However, the total is far lower than the £40m that was lost in total. Swindon-based Farepak encouraged customers, the majority of which were from low-income households and pensioners, to make monthly deposits in exchange for vouchers sent out before Christmas. BDO Stoy Hayward, said in a statement: “The action issued by the joint liquidators of Farepak Food and Gifts Limited against the directors of Farepak has been settled with no admission of liability by the directors... The terms of the settlement are confidential.”

 No date has yet been set for the new settlement to be paid.

Posted at 09:02PM Apr 26, 2010 by Kelly Board in Insolvency  |  Comments[0]