Doorstep Lenders profiting from FAREPAK fiasco

I_was_a_fool

Xmas is obviously very important to the people who save all year for it. The reason they use schemes such as Farepak is that the money is then out of their hands, they cant use it for the electric bill etc. Ironic that Farepak then used their money for the equivalent of THEIR electric bills, being the debts of the parent company.

There should be legislation that forbids ANY savers money to be used in this way.

dawn2dusk

It makes me so mad that it is always those that can least afford it,end up paying.:mad:

I think i will find out if there is a credit union locally.

Psykicpup

Problem is these people who have suffered have very few options in the first place & now with time running out.....
Its all very well saying Why don't people realise christmas happens every year, not having the top toys will not hurt their children They did realise Christmas happens every year that why the majority have been using Farepack for years! & when saving this way means ALL the kids presents not just TOP TOYS then losing the lot is going to be devastating.
Lets face it most of these people are on low or limited income - Ive been there & I know I would take one of these loans just to be able to have a couple of bits of fancy food & a couple of pressies for the kids - in fact only yesterday I cleared my Provident loan!!! (177% APR I've been informed!!)

I totally agree we need legislation to stop this from happening again

sarah_elton

rog2 wrote:

I agree with you bh - in all honesty, the average Farepak customer was genuinely trying to pay up-front for something that would bring a little bit of pleasure without the need for debt.

Ahhhh this makes me so angry!!! I *know* the people Farepak market too aren't financially savvy. But there is an alternative to a non-FSA regulated company to pay for things without getting into debt. It's called saving at a bank!! Virtually anyone can get the most basic of accounts, and money would be (99.99999%) safe, and there might even have been a few pence interest.

One of the FSA's responsibilities is promoting financial awareness among consumers, and while I don't think it's practical to extend its regulation to Farepak style companies, they clearly need to be doing more in this area. And the media should have a responsibility to help and take a harder line.

I saw the Beeb lunchtime news too and while these other companies are vultures, people have responsibility for their own decisions. These companies wouldn't be in business if people said no thanks.

I agree with others on here - the BBC news seems to think Christmas has to involve a £1000 budget for presents and big meals. It's crazy.

I'm going to my mum's this year, and it's her, me and my brother. We decided we're sick of spending £30 on presents a head that end up sitting in a corner. This year we're going back to childhood. We've got a limit of £5 per person spend, and for that you have to get as many things as you can, and they all have to be things that'll keep us entertained on the day. Do you know the cool toys and crafts things you can get in Poundland and The Works?! Sure they're not things that'll last, but we'll be having a fun day together as a family.

rog2

sarah_elton wrote:

Ahhhh this makes me so angry!!! I *know* the people Farepak market too aren't financially savvy. But there is an alternative to a non-FSA regulated company to pay for things without getting into debt. It's called saving at a bank!! Virtually anyone can get the most basic of accounts, and money would be (99.99999%) safe, and there might even have been a few pence interest.

I take on board what you are saying Sarah, and for many of us this would be the most logical option.
I would imagine, though, that most people paying their 'FarePak' money didn't even give a thought to whether or not the company was regulated by the FSA or not. It's no different really, than paying for anything 'up-front' like holidays for example, most people do this without hesitation and yet we only need to look at the number of holiday companies/cheap airlines that have gone bust in the last 5 years and still many people do not check whether their holidays are safely covered.
How many people buy Saving Stamps at Tesco/Asda for Christmas? What would happen there if the company administering this scheme went bust?
There is, also, the temptation to use 'money' that is sitting in a bank account for other things, throughout the year, whereas the common conception with Farepak was that as the money was going solely towards the hampers, then that, at least was safe.

looby75

I've read a lot of criticism about the amounts of money some people have tried to save (and subsequently lost) and I don't know if the people I know who use these kind of schemes are unusual but a lot of them don't just use the vouchers for Christmas.

For eg, a friend of the family lost £900 because of farepak,(£700 in vouchers, £200 in hampers) she never had any intention of using all this at Christmas time. She was planning to use about £400 for xmas, £150 to set aside for birthdays throughout the year and this year she ordered and extra £150 worth of vouchers mid way through the year as she discovered her dd was pg and thought it would be a good idea to have some spare vouchers for the jan sales to buy a pushchair and cot for her first grandchild.

In her mind she was being sensible, she couldn't dip into the funds because they would have been in vouchers so they were untouchable.

Lots of people I know do this, they use a Christmas club as a way of budgeting through the year, so some of the figures being quoted are a bit misleading (ime anyway)

beanielou

rog2 wrote:

You are absolutely right beanielou - in fact they also interviewed a lady from a credit union, who said exactly that. The problem is that will these unfortunate people give that much thought when confronted by someone waving a wad of fivers at them, whilst concealing the baseball bat behind their back?

rog2 You are so right & I think its so sad.
I was in my local Woolies the other day & they were allowing a doorstep lender to hand out leaflets.i was just incensed.When they approached me I said no that I worked in a CAB.:eek:

lil_me

I'd rather live on nothing than give money to the likes of Shopacheck, if I don't save it up my kids don't get simple as that, I really hope people don't get into piles of debt because of this, especially with companies like that, Xmas isn't about all the presents you give, I really hope most find another way to provide what the family need and don't go OTT getting into more debt.