Unfairpak Forum - How Farepak Stole Christmas

On Friday 13th Oct 2006 - Farepak Hampers went into administration. Over 100,000 customers were told that no food hampers or vouchers or other goods will be supplied this Christmas as promised, and no refunds! Share your thoughts here...
Winners - Scottish Polictian of the Year Award
It is currently Thu May 23, 2019 5:03 pm

All times are UTC [ DST ]




Post new topic Reply to topic  [ 5 posts ] 
Author Message
 Post subject: "Bengali Farepak"
PostPosted: Mon Jul 23, 2007 10:57 am 
Offline
Site Admin
User avatar

Joined: Sat Oct 21, 2006 3:01 pm
Posts: 13002
Location: newcastle
http://money.guardian.co.uk/news_/story ... 59,00.html





Consumer affairs




Despair as money transfer firm collapses

· £1.7m saved and sent home to families is lost
· Boss in 'Bengali Farepak' receives death threats

Share
reddit this



Audrey Gillan

The Guardian, Monday 23 July 2007 09.30 BST
Article history



Beauty Akter saved for months to raise £263 - two years' salary in Bangladesh - for her daughters. Photograph: Martin Argles


For four years, Beauty Akter has worked in Indian restaurants in London's Brick Lane, scraping together £5 a week to send back home to her two little girls still living in Bangladesh. The £263 she transferred to them last month is the equivalent of around two years' salary in her home country.

But like thousands of other Bengalis in the United Kingdom, 34-year-old Beauty's money has been lost following the collapse of the money transfer business she used.

On June 17, Mohammed Abdul Haq, 73, sent £2,982 to his village in Bangladesh, followed two days later by £1,634. Every year the pensioner collects money from members of his family in London, Coventry, Manchester and Newport for his "very, very poor" relatives in Bangladesh. Like Beauty, his money has vanished.

Last month First Solution Money Transfer collapsed, taking with it at least £1.7m in savings belonging to at least 2,000 clients in a scandal that has been called the "Bengali Farepak", after the collapse last year of the Christmas savings club. First Solution stopped trading on June 28. It has since gone into the hands of insolvency practitioners and is now being investigated by police. Premises up and down the country have been closed.

The company, founded three years ago, took its turnover from £3m to £87m and became one of the biggest businesses of its kind in the country.

It admits that there has been a "mismanagement of funds" but denies any wrongdoing. Its chairman, Fazal Mahmood, has claimed that he has received death threats. Windows at one of his premises on Brick Lane have been smashed.

In a statement First Solution said: "We deeply regret the fact that as a result of the rapid growth of the company's business the necessary management procedures were not in place to effectively manage and control all the transactions being processed through our agents.

"The directors are confident that in due course we will show completely that the cause of the problems had nothing to do with any impropriety or dishonesty on the part of the directors or management of the company of which there has been none, but was due to credit that had been given by agents of the company to customers. This resulted in delay in passing of monies from agents to head office which resulted in regular losses sustained from exchange rate fluctuations."

Customers use money transfer businesses because they are cheaper than banks, deliver cash quicker and are often located within the hearts of immigrant communities in Britain - First Solution had a branch in the London Muslim Centre in east London. For a commission, the money is wired over and usually arrives at its destination within a few days.

The company claims that an announcement on a British Bangladeshi television station that it had gone bankrupt was untrue. But as a result a loan was withdrawn by a bank in Bangladesh, causing severe financial problems.

Ms Akter is not impressed by this explanation. She said: "It took me five to six months to save that money, working six days a week. I was shocked when I found out my sister had not received my money. She is bringing up my children and I am working here so that I can send them to a good school. I trusted these people, I saw them every day. My two babies are very little babies and all this time I am working to feed them and only being able to phone them while my sister looks after them - and for what?"

Mr Haq has the two yellow remittance slips which prove he sent his money to his extended family. "I have been working hard in this country since 1954 but now I am not earning and I am a poor man, but I always help my family because they are even poorer. Now they will have nothing. It's shocking."

Dullah Miah, 35, a waiter, believes he is the single biggest loser in the UK, after remortgaging his home in Stoke-on-Trent and sending £70,200 to Bangladesh to build a property. "This is breaking my heart. They took my money on 21 June and closed up all their shops on 28 June."

George Galloway, MP for Bethnal Green and Bow in east London where most people have been affected, has called on the government to intervene and is asking city businesses to help those hit. He alleges that the company has acted in a criminal manner. The Economic Secretary to the Treasury, Kitty Ussher, is likely to issue a Commons statement and to sanction a rescue package for those affected.

_________________
Image


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Jul 23, 2007 12:51 pm 
Offline
Site Admin
User avatar

Joined: Wed Oct 18, 2006 7:14 pm
Posts: 10990
Location: Edinburgh
This is really sad because these people in Bangladesh whom the money was being sent to really are poor and can ill afford to lose anything :( I hope they [the government] do intervene for this is truly a deserving cause.

_________________
All good things come to those who wait!!!


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Jul 23, 2007 6:39 pm 
Offline
Information Mine
User avatar

Joined: Wed Oct 25, 2006 1:41 pm
Posts: 326
Location: Wiltshire
Yet again it's people who are trying to do the right thing that are affected. That poor mum leaving her kids behind half way around the world and all in vain.

I do hope something is done for them.

Zoe

_________________
Meet me as Thomzo on http://www.selfsufficientish.com/forum
Check out my blog http://designedbyzoe.blogspot.com/


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Mon Jul 23, 2007 7:02 pm 
Offline
Information Mine
User avatar

Joined: Wed Nov 01, 2006 12:07 pm
Posts: 5866
Location: Lancs.
Gobsmacked about this as it its the poorest people that can ill afford it.

I too do hope that there is something that can be done over this.

_________________
We walked the long and winding road to get a measure of justice.
Image


Top
 Profile  
Reply with quote  
 Post subject:
PostPosted: Fri Aug 10, 2007 11:43 am 
Offline
Site Admin
User avatar

Joined: Sat Oct 21, 2006 3:01 pm
Posts: 13002
Location: newcastle
http://www.newstatesman.com/200708090015


No solution for the poor

Paraic O'Brien

Published 09 August 2007
Print version
Email a friend
Listen
RSS

Observations on fraud




The company slogan was "Shopner Shomadhan", which translates as "Dreams Realised". Now, First Solution goes by the tag line the "Bengali Farepak".

Thousands of people living in the UK transferred at least £1.7m to their families in Bangladesh and it "went missing". The largest single payment to disappear was sent by a businessman, Dullah Miah. He lives in Stoke-on-Trent and used First Solution to transfer £70,000 to build a house for his family. It never arrived. Most of the sums are smaller. The real tragedy is that money earned by some of the hardest-working people in the country, destined for some of the poorest people in the world, vanished.

Mohammed Abdul Awal works as a chef in one of Brick Lane's curry houses in the East End of London. He arrived in the UK just 18 months ago and managed to save £500. This was to be sent to Bangladesh to pay for his sister's wedding in June. First Solution, with a branch next door to the restaurant, was recommended by a friend. The company had 41 branches and more than a hundred agents nationwide.

The transfer fee was cheaper and the money got to its destination quicker than with bigger operators like Western Union. Not this time. Mohammed's sister is still waiting.

The company has been run into the ground. The three directors - Fazal Mahmood, Gulam Robbani Rumi and Shah Hadi - butchered the golden goose. And First Solution was a Golden Goose. Its turnover grew from £4m in 2004 to £87m in the last tax year.

Part of the reason for its success was that, after the 11 September 2001 attacks, western governments tried to clamp down on money being transferred informally across borders. So, for example, the Department for International Development gave the Central Bank of Bangladesh a £7.5m grant in 2005 to help encourage more formal, "safer" ways of transferring money. As a result, more "professional" operations such as First Solution cashed in. I asked one branch manager in east London how much money would be handed over his counter to be transferred on any given day. "On a bad day, £30,000," he said.

Last year, First Solution took on 30 extra agents to handle demand. They advertised extensively on Channel S, one of the biggest UK-based Bengali TV channels, and the money flooded in. Then it all started to unwind. They didn't have the infrastructure to cope with the expansion. They couldn't keep adequate tabs on the new agents. Some of them decided to sit on the money for a while to see if they could benefit from the exchange rate. Some of them didn't hand over the money at all. Rumours started to circulate that something was seriously wrong with the company and then, during a phone-in show on Bengali TV, a caller declared that First Solution was going bankrupt.

Panic ensued. The next day crowds of people gathered outside branches demanding their money back. Branches started to close. A week later, Fazal Mahmood was interviewed by BBC London at a safe house because death threats had been delivered to his home. He broke down and explained that the company was going into liquidation. He insisted that none of the directors had done anything illegal and that they would refund as many people as they could.

George Galloway MP set up a creditors' group and raised the matter in parliament. The following week, police and detectives from the Insolvency Service announced that they were investigating what had happened.

A charitable fund run by the Sir William Beveridge Foundation, similar to the one started after the collapse of Farepak, has been set up (helpline: 0845 602 2548 ).

_________________
Image


Top
 Profile  
Reply with quote  
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 5 posts ] 

All times are UTC [ DST ]


Who is online

Users browsing this forum: No registered users and 2 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
cron
Powered by phpBB® Forum Software © phpBB Group