Farepak debacle

[greatmoorred]

I was talking to a guy at work yesterday and he told me that farepak is owned by the same company that owns ( owned) Kleeneze. Remember them, pyramid selling, getting some poor sap to flog cheap shit while the guy at the top of the pyramid sits on his arse and rakes it in.
Apparently Farepak was set up a similar way, with "agents" selling savings schemes to their friends and work colleagues etc..
Which, of course, were worthless and when HBOS pulled the plug on them, taking £45m first, everybody got burnt. Except the directors and the bank.
Merry Christmas.

[vixen]

HBOS made a fortune out of it. Remember, ANYONE who made payments by visa or visa debit, contact the bank as you should be able to reclaim the money.

Hope this helps some of you.
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Bikeless!
https://www.cliqueycuntsmcc.co.uk/
RIP Lisa - we will miss you.

[froggeh]

The guys are definitely 'vermin' but FFS why does anyone put money away in a NON-interest earning obvious scam like this?

[greatmoorred]

I think its the usual story of those who are most needy getting f**ked over by unscrupulous conmen.
If youve been declared bankrupt there are problems getting a bank account again, or the elderly maybe, who might find it confusing setting up a savings account.
I know what you mean though, the only place my money goes is into a bank. At least then you are 99.9% sure that its safe.

[Ste]

So they made a very bad choice of how to save/invest their money. Can see lots of disadvantages to using them, not sure if I can see any avantages at all over just putting money in a draw or a box under your bed.

"The Farepak Response Fund (FRF) is an independent charity being set up to administer a scheme to provide relief to families affected by the collapse of Farepak." ermmm WTF, thats taking the piss starting up a charity fund for it!

[syl]

If I understand it correctly, Farepak was doing very nicely. Unfortunately, the company that owned Farepak, EHR, went down the shitter and the guy who managed Farepak was just as upset as his customers when HBOS pulled the plug on the overdraft it loaned the parent company. The parent company hadn't ringfenced Farepak's investors' money, but had been using it to trade with.

https://news.bbc.co.uk/1/hi/business/6142218.stm
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Current bike: Kawasaki Z750S

[brooky]

As its already been said, the sad fact about this happening is that its often the less well off people who usually join these schemes and as such will struggle even moreso to recover from this and as such has totally destroyed christmas for thousands of familys.

The top men from the company should have their accounts frozen and their assets sold to help compensate for the victims. Pure scum is the only way they can be described.

Also avoid the Home Farm scheme as I beleive its al owned by the same group.

Jake
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Suzuki GSX-R 750 K6.

[BigChris]

[bernardhesfor...]

From the FINDEL discussion board on iii.co.uk. Great facts ...

####################
It’s all about timing it seems.

On this Friday, 13 October 2006, before the Farepak story broke, Findel neatly announced that it had acquired “certain assets” from the Administrators or Administrative Receivers of European Home Retail Plc (EHR). What it amounted to was that these “certain assets” were effectively the WHOLE of European Home Retail except Farepak, the only other remaining item.

Because of the nature of Farepak’s customer base, hard pressed families trying to save for Christmas, this story will “run & run” and there’s a lot of unravelling to be done. Upwards of 150,000 families are affected (approx half a million individuals including the kids) and it looks like around £40m of their pre-paid savings in advance have “gone west”. How can this happen when no goods have been supplied?

Talking of unravelling, I point out some things here that ALL readers should be aware of, particularly investors in Findel and the sorry customers of Farepak. In point form for clarity (please pass onto your friends and post the content in the general forums on this issue – it’s quite revealing and thought provoking, raising so many more questions):-

1. It was only on Friday the 13th October that EHR (European Home Retail) announced that it had appointed an Administrator (RNS 4830K)

2. Miraculously, on that very same day Findel announced that it had effectively acquired all assets of EHR apart from Farepak.

3. Now, I’m not a mind reader but this is excellent timing and pretty nifty work indeed. Did the Administrator not want to “look around” to see who else might be interested – in order to get the best price? Seems not.

4. For Findel to be so quick on the uptake, one could be forgiven for thinking that they had some “inside knowledge”. Well, it turns out they probably did have. They had a joint venture with Farepak called Home Farm Hampers and Farepak owned 40% of this company. Amongst the “certain assets” Findel bought from EHR (aka the Farepak holding company) was the 40% stake in Home Farm Hampers – see www.homefarmhampers.co.uk for a profile of this outfit.

5. On looking at this website and the homepage message from Jonathan Sharp (MD), it reassures agents that theirs and their customers’ money is safe and “ring fenced”. Mr Sharp even says “that one of our competitors, Farepak Hampers, has suffered financial difficulties” … bla, bla, bla, don’t worry etc. For the uninitiated, one might be forgiven for thinking that Farepak had no connection at all with Home Farm Hampers?? Not so, Farepak owned 40% of it!! Could this be “spin” and “sharp practice” from Mr SHARP?

6. It is interesting to note that EHR was formerly known as Kleeneze Plc, probably remembered by many of us. Kleeneze was established in the UK in 1923 and has been trading successfully for some 80+ years!!. Also, Farepak Hampers has been operating successfully since 1981 for some 25 years. Home Farm Hampers, the jointly owned company between Findel (60%) and Farepak (40%) was established in 1986 and has been operating successfully for some 20 years. Whow, what could have gone wrong with all this pedigree??

7. After all, taking a vast amount of money in advance (ie it seems about £40 million) for goods and vouchers you will deliver later doesn’t quite seem a high risk business model … it’s not and that’s why the 5 major “hamper companies” in the UK have done so well and lasted so long. So, where did the £40m advance payments go?

8. As part of EHR, it seems that Farepak was being used to “provide” working capital (ie cash) for the rest of the EHR Group to keep it afloat. This was the advance payments of Farepak customers for their Christmas plan, the savings club business operated by Farepak/EHR. Now, Farepak only employed about 20 full time staff, so it’s “infrastructure” costs were relatively low and they got all this money paid in advance. That’s a nice business model and why they’d been operating successfully for 25 years.

9. Hence it seems, as commented by the Mail on Sunday/Financial Mail of 12 November, that this savings money had been diverted elsewhere. Where though and who allowed this to happen? Well, maybe we should look to the top first, namely the Chairman Sir Clive Thompson (for people who don’t know Sir Clive he was previously at Rentokil where he closed down the pension scheme for all but the executives and then, when he was moved on, got £390K compensation and a £690K pension – beggars belief doesn’t it – well, that’s his pedigree. He also went public at Rentokil decrying the increase in the minimum wage by 30p!!). So, HE PRESIDED over taking the liquid cash from Farepak customers and using it to “shore up” the holding company EHR.

10. So what was HER? It consisted of two parts – the Catalogue Home Shopping arm (Kleeneze and Farepak) and the Internet Retailing Business (relatively new, all the .com websites). Now, as I have said before, Kleeneze had been operating successfully for 80 years and Farepak for 25 years. So, could the problem have been with these “new fangled” Internet retailing businesses … eating up the cash to get them going/keep them afloat? Seems highly likely to me as an innocent observer. AND, Sir Clive Thomson allowed Farepak customers’ money to be diverted for this end. No “ring fence” there. Time for legislation I think for savings club funds to be ring fenced.

11. We then get Sir Clive, late last week, saying that it was HBOS, the company’s bankers, who were at fault for not standing by them. As I understand it, the final proposal which was rejected by HBOS was … “continuation of the existing facilities reduced by the sale of certain assets, the sale of Farepak and the provision of loan finance from various parties”. No wonder HBOS rejected this proposal, who wouldn’t? – a let us go deeper into “hock” proposal. This is borne out by the fact that Findel neatly then bought everything EXCEPT Farepak and yet Sir Clive was trying to sell it as art of his proposal?? Whow!! He’s just shifting the blame onto an easy target such as HBOS because they make money – don’t be fooled or part of this “rabble rouser’s” game. Sir Clive Thomson should be debarred from being a Director of any company again … FOREVER.

12. So, in summary. Findel miraculously bought all the assets of EHR, apart from the FarePak business, from the Administrator on the very day they were appointed, Friday the 13th. How did they know? BUT, why would anyone want to associate themselves which such a date and such a story to “blow up”. Well, maybe it was a “now or never” deal on Friday the 13th, get the deal done all in cash and the “horse has bolted” before the story breaks on the Monday, 16 October.

Oddly enough, as Farepak is now out of the UK “hamper company” equation (there are now only 4 in HITA – a worthless association shown to be meaningless out of this fiasco), Findel, via Home Farm Hampers, could do very nicely picking up these customers, an identifiable section of the UK population relying on such schemes. As Findel were inextricably “associated” with Farepak for over 20 years (joint venture established in 1986) they might “somehow be in the know” about Farepak’s customer base. That’s where any remaining “Farepak value” lies and do Findel now have this? This question must be asked and the transfer of such information CAN BE RIGOROUSLY audited.

Why didn’t the Administrators take due care and look at other offers for the EHR assets – to try to get the best for shareholders and Farepak savers?????

It looks like an “inside” fire sale to me … to people in the know. Also, the transaction was £34m cash and less than the apparent £40m lost by Farepak customers. Sounds like a “snip” for Findel. In their own press release of that very same day, Friday the 13th of October, Findel also stated they had acquired “and the infrastructure assets required for the Home Farm business”. It should be obvious to ANYONE that Findel knew what was going on and that they miraculously moved “light footedly” to acquire all of EHR apart from Farepak at £34m cash before the story broke.

There is DEFINITELY SOME UNRAVELLING TO BE DONE HERE and it remains to be seen exactly what part Findel played “as a player” in this sorry story for so many families in our country. DYOR

[kawakid]

I had a mate joking about this, ohh he's well off 30 odd K a year etc, saying why didn't they just stick it in a bank.

They were doing the right thing and they've been done over, the people in these schemes, don't have any other savings they can dip in to. Probably only "Fast Eddy Shop 29% interest rates".

Its sickening

[riti]

just to put a few people straight.

I am not involved with farepack, but I am a kleeneze distributor.

Farepack went up the shit because another company went down, and this brought down a credit company that meant that farepack couldn't trade.

Kleeneze was not involved in Farepack going down or lots of innocent people losing their money. Yes, kleeneze was part of the same group as farepack (european home retail), and when it was obvious that farepack was going to the wall kleeneze (with some other companies) was sold to Findel. I think this comes under normal business sense. Kleeneze is a very profitable business for the distributors and the shareholders, so why should it not be sold off. I do agree that the guys that paid into the farepack scheme should get their money before the tosser that ran farepack, but don't judge kleeneze because of him.

I read somewhere that a lot of kleeneze distributors were also collecting money for Farepack. This is rubbish. All of the people I know that do Kleeneze (and we're talking well into the hundreds) are concentrating on kleeneze and wouldn't waste time doing anything else.

And would the guy that called kleeneze a pyramid get his facts straight. Kleeneze is not a pyramid, nor does it rip people off, or take advantage. probably this guy doesn't know anything about kleeneze (or bogus pyramid schemes), and is just spouting what he heard from his 'very clever mate down the pub'. I'm quite happy to go into how kleeneze works for anyone that is genuinely interested. I've been doing it for two years, and in the next six months I'll be giving up my £26k a year job to do it full time.

[bazza]

[riti]

[bazza]

[riti]

And here was me thinking all bikers were like me - considerate and open minded. I guess I've been proved wrong.

Enjoy your forum. I'm sure I'll be missed.

[Mister James]

[TheShaggyDA]

[colin1]

buying on credit where u pay later is one thing, but paying for a hamper months in advance and trusting the company to give it you is asking for trouble really
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colin1 is officially faster than god

[Paivi]

What I don't understand is how some of these people complain that they've lost, in some cases I saw in the news, as much as £1,500! £1,500 on Xmas hampers? Even if that comprised presents, it'd still be a hell of a lot of money. How about learning & teaching the kids some prudence?

[bazza]

[Ste]

[kawakid]

I think everyone's missing the point.

These people are generally the poorest in society, trying to do they right thing by saving.

Forget special high interest accounts and the like, they simply wanted a place where they could save for a great Christmas, where no one had access to (even them selves).

Its very easy for people with good financial planning and high earnings to make comments, for a lot of us a few hundred pounds lost wouldn't matter.

But it matters so much for these people, they have nothing else, but they new they'd have a good Christmas and their children would be happy.

Please stop insulting these people and imagine you had nothing.
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I've a twin and a 4.

[Mister James]

If you can save £1500 for xmas, then you don't have 'nothing'.

These people obviously had SOMETHING to spare, and chose to invest it unwisely.
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>Soultrader Mister James, I bet you are a copper
>Bazza Wow. Eyes like a shithouse rat, you...

[feef]

[feef]