New fund to prevent Farepak repeat

Citizens Advice has been given an extra 80,000 to help people save safely for Christmas after the Farepak collapse.

The Office of Fair Trading (OFT) launched the 1m "Save Xmas" campaign in June to help prevent a repeat of the savings club's downfall in 2006.

Farepak left an estimated 150,000 savers about 40m out of pocket when it went into administration last October. Customers have been told they should get back 5p in the pound, but do not know when they will receive any money.
This is the second grant the OFT has awarded to Citizens Advice as part of the "Save Xmas" campaign.

It was devised to help consumers understand their options when saving over the short term for events like Christmas.

"We are delighted to be able to provide additional funding to our partners at grass-roots level," said Sue Cook, head of consumer and business education at the OFT.

"Citizens Advice's involvement has been fundamental in delivering the Save Xmas campaign to local communities," she added.

Delayed payouts

John Rhodes, head of financial capability at Citizens Advice, said the group was pleased to contribute to the success of an important campaign.

"Our regional forums working with local bureaux and partners are determined to improve the financial awareness of hard-pressed families," he said.

"This initiative helps ensure that people can save for Christmas with genuine confidence."

Earlier this year, the government announced that money paid into similar Christmas savings schemes would be kept in separate ring-fenced accounts.

This would mean customers' money could be returned to them, should the company go bust.

Farepak's administrators BDO Stoy Hayward put the company into liquidation in October. It has received claims for 38m from 113,000 customers and agents.

Victims have been told to expect no more than 5p back for every pound they lost. But the company has not set a timetable for repayments to be made.