Anyone like to explain in simplish terms how Farepak have...?

Question

rinsed the public in whats seems a legal way?

Answer 1

as it was part of a group that went belly up the money that was being paid went to the parent company who directors have to be sure they can still trade up until the last this is what they did until hsbc pulled the plug and said that's it

Answer 2

The Farepak collapse was caused by a combination of mismanagement and market forces. Basically, Farepak accepts monies from savers and, just before Christmas, the savers get from Farepak their choice of hampers, gifts and vouchers. This system worked well for many years until two issues combined to cause it's collapse. The first issue is that Farepak's parent, EHR (European Home Retail), was using Farepak's savers' money as working capital for it's other businesses which were in trouble. This was clearly unethical and a potential major problem. The second issue is that, until recently, the vouchers that Farepak issued for High Street stores (upon which Farepak only made a few percentage points profit on their face value) did not have to be paid for by Farepak until they had been spent. In practice, the shops where the vouchers had been spent invoiced the voucher company in January and final payment was made by Farepak in April. However, retailers have been badly burnt by the collapse of one of Farepak's rivals earlier this year and the voucher company went bankrupt. So the retailers insisted that Farepak pay for the vouchers upfront. This was the issue that caused Farepak to go into administration in October this year as Farepak did not have enough cashflow to meet it's commitments.

Answer 3

In simplish terms, Farepak signed away the rights to their hamper income to cover a bad debt. When one of their rivals collapsed and caused the voucher-buying system to collapse with them, suppliers demanded money up front to secure goods - Farepak didn't have it. Their bank (HBOS) didn't want to lend more money to them but didn't pull the plug until the last possible moment, ensuring maximum gain for the bank at the expense of the poor customers - which is why banks announce record profits every year!
Cheers, Steve.

Answer 4

i can tell you this farepak. have conned a lot of people becouse they dont actually give you any orders in advance.u have to pay for them first over a 48 week term before they send it out in time for xmas.now if littlewoods and grattan ,freemans e,g can give people there orders on credit i would understand them going bust .but farepak have collected a lot of money from people but give nothing out why i dont know but my guess is a few topcats over/ spent on the hoiliday period maybe there wifes needed a nip or tuck .but i bet someones rubbing ther hands right now. good luck to them then eh.

Answer 5

basically fairpac act like a bank you give them money they invest in other stuff( and cross your fingers) hopefully they give you a nice hamper(which you paid for and which they earned a nice lil intrest on)
the terrible thing is they can set up another firm if they want all they do is change the DM and they can start up again all i can say is when the milkman used to do hampers we never had anything like this.
I hope all that have been affected get some of their money back. unfortunatly it wont be in time for christmas and it will probably be about 10% of what they are owed. i find this sickening as they DM will be sitting pretty. I hope he eats nut roast and santa gives him a piece of coal.......nah scratch that starve him.