MEP asks Europe to help Scotland’s Farepak victims

06 November 2006
Scottish National Party MEP and European Spokesman Alyn Smith has today raised the collapse of Farepak in the European Parliament with Commissioner Kyprianou.

Mr Smith has been contacted by constituents seeking a European response to the problems caused by the collapse of Farepak. He has lodged questions asking the Commissioner what legislation and regulation exists to protect consumers in this situation.

Commenting on the situation Mr Smith said

"My sympathies are with all those who had invested in Farepak Hampers and who now face financial problems this Christmas.

"Hamper saving schemes offered an alternative for many families to overdrafts, credit cards or even loan shark debts. It is unfortunate that Farepak have collapsed leaving so many people out of pocket.

"I am asking the Commission what, if any, legal rights the EU gives consumers in this situation and if in light of the problems at Farepak it will look at how this area is regulated.

"I know the House of Commons are currently investigating what went wrong and that customers can lodge claims with the administrators but it does not look promising. I only hope that families resist the temptation to turn to unscrupulous lenders or high interest loans to pay for Christmas."

The Parliamentary Question is below

For many years schemes have operated in Scotland and across the wider UK, run by companies, which allow individuals and families, particularly those on low incomes, to save money towards the expense of Christmas celebrations. This money invested throughout the year then provides a food hamper and vouchers for shops in order to allow people to enjoy Christmas without resorting to debt, overdrafts, credit card problems or unscrupulous lenders.

Farepak, owned by European Home Retail, one of the major providers of this service recently had its request to renew its overdraft refused and as a result has entered receivership. It is unlikely that the administrators will be able to provide any of the goods customers are due this December or any return at all to the customers. Customers seeking to claim any money back must go through the administration process, something which many will not have the time or resources to do. An initial attempt by the British Retail Consortium to find a voluntary solution with retailers supplying some goods on a limited basis as a goodwill gesture to customers has collapsed.

Can the Commission clarify under European legislation what protection customers in these schemes are entitled to, if such schemes are in any way regulated by EU legislation, if the circumstances of the collapse of Farepak are being investigated by the Commission with a view to increasing consumer protection in this area and if any action can be taken at EU level to alleviate the circumstances now faced by customers of Farepak.