Farepak Hampers began trading in 1969 from Westmead Drive, Westlea, Swindon. By 2004, Farepak employed 130 core staff – and during hamper production employed an additional 150 temporary packers. By 2006, the number of employees had dropped to 20, with 75 additional temporary packers to be taken on during the Christmas period.
Farepak Hampers’ origins can be traced back as far as 1935. Bob Johnson was appointed Managing Director with 500 Agents of this small Christmas savings club in 1969 which operated out of a butchers shop in Peckham.
Alongside this, Kleeneze Homecare had been operating since 1923 (now Kleeneze UK) and was acquired by Farepak in 1995. Farepak changed its name to Kleeneze plc and at this time extracted the central part of their business to its subsidiary Farepak Food & Gifts Limited. Kleeneze plc changed names again in 2006, this time to European Home Retail plc (EHR).
On 30 June 2006 an announcement was posted on EHR’s website advising that their existing funding would not last past autumn and they would accordingly be seeking extra funding. The Hamper Industry Trade Association (HITA) – of which Farepak Food & Gifts Limited was a member – immediately contacted the EHR Directors and were given assurances that the required extra funding would be forthcoming.
EHR’s shares were suspended from trading on the Stock Exchange on 23 August 2006. Again, HITA contacted the EHR Directors and asked if Farepak customers’ payments would be ring-fenced, only to be advised that this was not necessary. Thereafter, on Friday 13 October 2006, Farepak Food & Gifts Limited, a subsidiary of European Home Retail Limited had an Administrator appointed following a rejection of a final proposal from their Bank, HBOS (Halifax Bank of Scotland). This led to the whole of European Home Retail being forced into Administration.
Farepak and other companies like it are a convenient way to save for Christmas by ordering your goods in the preceding January and making weekly payments thereafter – in this case, for 45 weeks. Customers could either deal direct with Farepak or become an Agent and secure their own client base (normally family, friends and work colleagues). In becoming an Agent they would receive a % commission on their sales, which could either be taken off their bill at the end of September, or taken in goods, or they could have a cheque sent to them. Farepak was developed originally as a traditional Christmas Hamper company and grew to be one of the largest Christmas saving schemes in the UK. Thousands of customers used Farepak for their range of hampers, gifts and shopping vouchers.
As Farepak stated themselves “We use the experience and knowledge of our friendly staff to ensure that our Agents receive hampers that contain the best branded products and the freshest meats, at great value prices”.
Farepak further went on to state “As one of the founding members of the Hamper Industry Trade Association, we adhere to the HITA Code of Practice to ensure the security of your savings and the safe delivery of your hampers and gifts”.
As all Agents and customers of Farepak will now know, the above statement was a false promise – Friday the 13th 2006 will almost certainly be remembered by thousands of people in the UK who had Christmas 2006 literally taken out of their hands…
The Enterprise Act 2002
Prior to 15 September 2003 far too much protection was given to secured creditors, in that a Receiver could be appointed who would look out for the interests of the secured creditor only. With this in mind, the UK Government passed the Enterprise Act 2002 which took effect on 15 September 2003. This Act was designed to give companies some breathing space and to delay or prevent liquidation (the death of the company). Accordingly, since the Enterprise Act 2002, Administrators are appointed to companies in trouble, and their duty is to look at the company as a whole, which is good news for unsecured creditors. Furthermore, the Government withdrew themselves as a preferential creditor after the passing of the Enterprise Act 2002. However – it has emerged that payments to customers from the Administrators will amount to around 4p for every £1 that was put in.
An Administrator is, as the word suggests, there to administer the affairs of the company. BDO Stoy Hayward have been appointed Administrators of Farepak Food & Gifts Limited. An Administrator must be a qualified or authorised insolvency practitioner. The powers of the Administrator are vast. They have the power to do whatever is necessary for the management of the company’s affairs, business or property. The can take possession and dispose of the company’s property. They can remove and appoint directors, and furthermore they can investigate the company’s affairs. The Administrator must give some indication as to how the company arrived at the position it now finds itself in.
If you have been wronged…
Shortly after the Farepak administration order was made public, many people began to scour the internet for further information on what had happened and what could be done. To this end, a forum was set up at http://www.unfairpak.co.uk/forum/ – there is a wealth of information to be found there, along with a helpful and supportive community, and practical advice on what to do.
First and foremost it is imperative that you register your claim with BDO Stoy Hayward. This can be done via any of the following routes:
through the company’s website www.farepak.co.uk
by phone – Claim Registration Line: 0870 066 9826 Open from 8am – 8pm, 7 days a week
by fax – 01793 606057
by post to:
20-30 Kings Road,
If you are sending your claim by post we would suggest that you send photocopies and keep your original documents in a safe place. Furthermore, it would be sensible to send your documents ‘First Class Recorded Delivery’ and to keep the recorded delivery receipt with your original documents.
Within our forum we have Regional sections to enable you to get together with others affected in your area and begin campaigning.
There are various people that you can contact and complain to. The more that like-minded people like us keep Farepak in the media spotlight, the more likely it is that something will be done. Sadly, this is all ‘good news’ for media ratings, but as it will help maintain public interest in this story, it is in our interest to keep the media informed and to encourage responsible and representative journalism. A big thanks goes out to those journalists who have already done so.
Contact HITA (Hamper Industry Trade Association) and complain
Contact your MP – directly or through Writetothem
If you reside in Scotland contact your local MSP
Contact BBC Watchdog
Contact GMTV and other news channels (see forum for more details)
Contact BBC’s ‘Working Lunch’
The Right Honourable Sir Ian McCartney MP is doing fantastic work, as is the Labour Party campaign led by Jeff Cuthbert, Welsh Assembly Member for Caerphilly – register your support here
Contact HBOS (Halifax Bank of Scotland) and ask if they can shed any light on what happened (any HBOS shareholders out there?) firstname.lastname@example.org
Much headway has already been made, and we suggest that you get involved by supporting local and national campaigns. You can help a lot – even from your armchair.
Possibly the only hope for victims’ cash is either in ‘chargeback’ if payments were made via Credit or Debit cards and some help will come from the Farepak Response Fund which was set up to collect donations and has so far raised over £4million.
This page will be updated again very shortly – as we endeavour to extract all useful info from the forum and from other sources.
We would also like to welcome viewers of BBC’s Working Lunch, who are doing an excellent job supporting the national campaign on behalf of the victims of Farepak. The little fish bites back!