Christmas Pre-payment Association Press Release


24 July 2012                                                                                                         MEDIA INFORMATION


Greater protection now available for Christmas Club customers after FSCS intervention


Christmas Prepayment Association members extend consumer protection to cover a banking failure


The Christmas Prepayment Association (CPA), the self-regulatory trade association for the Christmas savings industry, has strengthened its terms and conditions to maximise the safety of their savers’ money. The move comes after the Financial Services Compensation Scheme (FSCS) proposed a number of changes to the CPA.


Christmas Clubs are not regulated by the Financial Services Authority and so do not come under the direct remit of FSCS. However FSCS can protect the Clubs’ funds in some circumstances, including if the financial institution holding the money fails but the Christmas Club provider continues to operate. Following an approach by FSCS in January the CPA has amended its Code of Practice to ensure that customers’ payments are placed with an FSA-authorised institution and clearly identified against the relevant individual. This means that in the event of a bank failure FSCS will be able to return the money so it can be used to fulfil their order.


The enhanced protection applies to schemes run by Country Christmas Savings Ltd, Family Christmas Savings Ltd, Park Christmas Savings Ltd, Flexesaver Ltd and Variety Christmas Club Ltd. Letters have now gone out to customers informing them of the changes. Banking deposits with the Post Office Christmas Savings Club, the sixth and final CPA member, are already covered by the Irish Deposit Guarantee Scheme.


Mark Neale, Chief Executive of the FSCS, said: “Although Christmas Clubs are not covered by FSCS we saw that a number of simple steps could be taken to improve the protection available for people who save with such schemes. We approached the CPA and are delighted they have accepted our suggestions to ensure that all customer funds are kept in FSA-authorised accounts, with individual amounts clearly identified. In the event of a bank failure, the customers of CPA members can be sure their money is safe.


“Customers should be fully aware of the risks associated with every product, including Christmas Clubs, before taking one out. They can check whether FSCS protection will be available by visiting our website or asking the provider. In these tough times, consumers can have peace of mind by knowing that FSCS will be there for them if they need it.”


Derek Walpole, Chairman of the Christmas Prepayment Association, commented: “Our members’ Christmas Clubs provide a service that hundreds of thousands of people find useful and convenient. They allow hard-working families to put aside some of their money to save for presents so they can enjoy Christmas. We want to do everything we can to protect our customers and so are delighted to tighten our code of conduct to do this.”


FSCS protects consumers if banks, building societies or credit unions go bust. Since 2001, it has helped more than 4.5 million people and paid out more than £26 billion. It covers the full range of financial services.





Notes to Editors


1. About the FSCS

The Financial Services Compensation Scheme (FSCS) is theUK’s statutory compensation scheme for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. FSCS is an independent body funded by a levy on authorised financial services firms. FSCS does not charge individual consumers for using its service.


Since 31 December 2011 the compensation limit for savings and deposits has been £85,000, up from the previous limit of £50,000. Pay-outs are now made on a ‘gross’ basis, ring-fencing deposits in the event that a consumer also holds loans with an institution that has gone bust. FSCS aims to pay compensation within seven days and in a maximum of twenty days if a deposit taker fails. For more information visit


2. About the Christmas Prepayment Association (CPA)

The CPA is a self-regulatory trade association for the Christmas savings industry which was set up after the collapse of Farepak in October 2006. It was launched in autumn 2007 and has six members – Country Christmas Savings Ltd, Family Christmas Savings Ltd, Park Christmas Savings Ltd (all three are subsidiaries of Park Group PLC), Flexesaver Ltd (also owned by Park Group), Variety Christmas Savings Club Ltd, and Post Office Christmas Savings Club. The CPA has a code of practice which is designed to give customers the “best possible service” and improve “the security of monies paid by them to members”.


3. Changes to the terms and conditions of the CPA’s members

The following changes have been made to ensure the FSCS can protect the Christmas Club customers of CPA members, excluding the Post Office, in the event of their bank failing:


  • Making clear that customer payments have been placed with a bank authorised and regulated by the Financial Services Authority, which is protected by FSCS.
  • In the event of that bank collapsing, that the Christmas Club provider is authorised to disclose the customer’s personal details (such as their name, address and payments) to the FSCS.
  • The Christmas Club provider will then receive any sum which the customer is entitled to from FSCS, which will then be applied towards the balance of their account to fulfil their order.


Post Office banking deposits are held in a joint venture with the Bank of Ireland and so are covered by the Irish Deposit Guarantee Scheme. However its Christmas Club card is not covered by FSCS as its remit does not extend to pre-paid/e-cards.


Skeleton Argument Nicholas Gilodi-Johnson Farepak Food & Gifts Limited

Nicholas Gilodi-Johnson Skeleton Argument



Mr Gilodi-Johnson is the only son of Bob Johnson, one of the founders of Farepak. In 1993, its shares were listed on the London Stock Exchange. The listed company was Farepak plc. It subsequently changed its name to Kleeneze plc and then to the European Home Retail plc (“EHR”) in 2005. The original Farepak business at this time was carried on by a subsidiary known as Farepak Food and Gifts Ltd (“FFG”).

Allegations made by Secretary of State for Business Innovation and Skills


Unfairpak would like to point out that these are allegations only and all persons named are innocent unless proven otherwise!!!!

5. The allegations of unfit conduct are, in very broad form, as follows:

5.1. Causing or permitting EHR to trade at the unreasonable risk of its creditors for the period from November 2005 (all defendants other than Mr Fowler) to the collapse in October 2006 and for the period from January 2005 to the collapse in October 2006 (Mr Fowler, who only became a director of FFG and EHR in January 2006) and, in the same periods, failing to ensure that that the FFG board was functioning adequately;

5.2. Causing or permitting FFG to trade at the unreasonable risk of its creditors for the period from November 2005 (Mr Rollason and Mr Gilodi-Johnson) to the collapse in October 2006 and for the period from January 2005 to the collapse in October 2006 (Mr Fowler, who only became a director of FFG and EHR in January 2006);

5.3. From 14 November 2005 (Mr Rollason and Mr Gilodi-Johnson) and from 1 January 2006 (Mr Fowler) seeking to mislead, alternatively failing to take adequate steps to inform, the boards of each of FFG and EHR of the developing financial situation in relation to a forecast inability of EHR to put FFG in funds to pay its major supplier at the end of January 2006;

5.4. In February 2006, failing to give any or any adequate consideration to (a) matters set out in a letter of representation provided to the auditors of FFG; (b) whether the financial statements for FFG for the period ending 28 April 2005 gave a true and fair view including by reference to any material post balance sheet events and (c) whether FFG’s auditors should have been informed of an inability of FFG to pay £5.6m due to its major supplier at the end of January 2006 and/or the collapse of such major supplier thereafter (Mr Rollason and Mr Fowler) and, in the case of Mr Rollason, permitting financial statements for FFG for the April 2005 year end to state that they had been approved by the board of FFG when the board had not met and had not approved the same;

5.5. From February 2006, failing to take adequate steps to inform the boards of EHR and FFG of the developing financial situation (Mr Rollason, Mr Fowler and Mr Gilodi-Johnson);

5.6. Seeking to mislead investigators appointed under s447 of the Companies Act 1985 as to the reasons for the failure of FFG, and its financial inability, to pay its major supplier at the end of January 2006 (Mr Rollason and Mr Fowler).

The Times 17 February 2011 written by our National Campaign Co-ordinator

To have been given a chance to write an article for the Times regarding Farepak is something I would never have dreamed of. However, that is exactly what happened and here is the finished, printed, published article.


Suzy Hall

February 17 2011 12:01AM

On October 13, 2006, some 123,000 people had Christmas ripped from their hands when Farepak went into administration, taking with it £40 million of savers’ money. I was one of them. My family lost £1,000, but others fared even worse.

But at long last, all of us who, month after month, deposited our money with the Christmas hamper company might have something to celebrate. This week, the Insolvency Service began formal disqualification proceedings against nine former Farepak directors. These people are not fit to run a company; they deserve to be struck off.

The campaign group Unfairpak has fought continuously to have the directors brought to account for their incompetent, greedy, selfish and irresponsible actions. I firmly believe that the directors did not expect for one second that there would be an uprising of savers calling for justice. But now we can say that the voices of the “little people” have made a difference.

On August 23, 2006, the shares of European Home Retail, the parent company of Farepak, were suspended. Despite this obvious sign that the company was in serious trouble, the Farepak directors continued to take customers’ money — and ultimately the Christmases of thousands of children. Knowing that some of the directors must have been aware that Farepak was facing liquidation makes us savers feel even more that we were regarded with utter contempt by them.

During the weeks after the collapse, while Farepak savers were worrying about how we were going to pay for our families’ presents, we were subjected to images on TV and in the papers of the directors leaving their million-pound homes, even jetting off on luxury holidays. But the portrayal of savers as simply “poor people” or “financially illiterate” was wrong. Farepak savers were prudent. They planned ahead in order to avoid debts at Christmas. Despite this prudence, at the moment we are to get back no more than 15p for every £1 lost, although we hope that figure will rise.

The outcry over politicians’ expenses and bankers’ bonuses shows that society is no longer willing to sit back and let the “fat cats” get away with it any more. We are becoming a classless, less deferential society and the Farepak fightback is another example of how the voices of the “little people” will be heard. If any good can come from the debacle, this could be it. This week a loud message has been sent: no one is above the law and, though it may take time, justice will prevail.


Suzy Hall is national campaign co-ordinator of Unfairpak