Legal action over Farepak scandal still up in the air

Rebecca Atkinson — Mon, 12 May 2008 11:27:43 +0100

The government has completed its investigation into the collapse of Farepak, but victims of the scandal are still in the dark over whether any legal action will be taken against the firm.

The collapse of Farepak in October 2006 left 122,000 families £40 million out of pocket. The firm acted as a savings vehicle, collecting money on a monthly basis from families who were then issued with vouchers for several high street shops.

The government launched an investigation into Farepak amid claims that customer money was used by Farepak’s parent, European Home Retail, to prop up its own finances. By the time of its collapse, Farepak had loaned £17 million to its parent and sister companies.