Savings scheme victim loses her six-year fight for compensation

Jackie Southby

Jackie Southby

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A MOTHER who lost almost £8,500 after a Christmas saving scheme went bust has lost her six-year-long battle for compensation.

Jackie Southby, of Harrow Lane, administered saving schemes for herself, her single-parent daughter, her 90-year-old mother and several elderly friends and lost the cash when she sent off money to Farepak, a catalogue firm which sold gifts, food, hampers and vouchers.

The company went bust in October 2006 and administrators moved in.

Mrs Southby is one of nearly 120,000 angry people who are owed almost £38 million in total across the UK.

She said: “It absolutely stinks. I feel sick as I have fought to get compensation for six years. At one point they (administrators) promised everyone who lost out would get 5p to every pound lost, then it was 15p, but now it looks like we will receive nothing. This is a kick in the teeth for everybody as we will not see a penny.”

Lisa Cooper, a mum who also lives in Harrow Lane, set up saving schemes for herself, members of her family and friends and sent more than £19,000 to Farepak. She will also see any of the money she is entitled to.

Another customer, Joan Thorp, of Roundwood Road, St Leonards, died in February last year. She had spent £450 and never saw a penny returned to her.

The Government’s Insolvency Service went to the High Court in May to try to get Farepak’s former bosses barred from being company directors.

But it has now abandoned the case after considering the evidence.

The Insolvency Service had taken up the legal challenge against the firm’s ex-directors, and Farepak’s parent company European Home Retail, in January, on behalf of Vince Cable, the Business Secretary.

The High Court judge, Peter Smith, has blamed the collapse of Farepak on a bailed-out bank. He said executives of Halifax Bank of Scotland (HBOS) forced Farepak to keep collecting deposits from savers even when it expected the company to go bust, benefiting HBOS to the tune of £10 million.

Last week the judge called on the bank to return up to £10 million more to customers who lost savings. Mr Cable has also stepped up pressure on HBOS, now part of the bailed-out Lloyds Banking Group, to boost the coffers of the Farepak compensation fund.

A spokesman for the Lloyds Banking Group said: “In light of the judge’s comments we have already begun a full review into the HBOS involvement with Farepak and will comment further once this has concluded.”