Campaigner welcomes new protection for Christmas saving club customers

Cllr Debbie Harvey, who represents Alway on Newport City Council, worked as an agent for Farepak when the scheme went bust in October 2006, leaving its members out of pocket and without the Christmas presents they had paid for.

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The scheme, which had around 150,000 members, allowed customers to put aside an amount of money each month towards Christmas presents. But when it collapsed it emerged it had leant £33 million of member's money to its parent company European Home Retail - and that this had not been paid back.

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Cllr Harvey spent years fighting for customers to get their money back and for the law to be changed to avoid a repeat of the case. And now, 13 years on, the UK Government has confirmed it is bringing in new rules requiring schemes to guarantee customers will not lose out if they go bust following a report from the Law Commission recommending it should do so.

Cllr Debbie Harvey

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In a letter to Cllr Harvey, minister for small business, consumers and corporate responsibility Kelly Tolhurst said: "We welcome the Law Commission's recommendations and commit to bring forward the necessary legislation to provide a power to protect the most vulnerable prepayment customers. We further commit to use this power to provide statutory protections for those putting money into Christmas Savings Clubs.

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"I know this is an issue you have campaigned about ever since the collapse of Farepak in 2006, and so hope that this news will be well received."

Cllr Harvey, who is also the council's cabinet member for culture and leisure and business manager called the news "an absolutely massive step forward".

"It's been a long time coming, but it's amazing," she said.

She added she had been particularly keen to get the law changed as many customers of savings clubs are older people.

"It was an absolute nightmare," she said.

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"Nowhere were we told the money wouldn't just be put into the bank.

"We didn't know at the time that would be using everyone's money to bolster up the other company.

"I didn't think savings clubs were allowed to do this, I don't think they should be be able to take the money and stick it in another business - but it's legal, and that's wrong."

Newport East MP Jessica Morden, who also campaigned alongside Cllr Harvey, also welcomed the news.

"Although a long time coming, this is very welcome news for those who use Christmas savings, and much credit must go to campaigners like Debbie Harvey who has worked hard to make this happen," she said.

"What happened 13 years ago, when those who were doing the right thing and saving for Christmas were left unprotected and devastated by the collapse of Farepak, was a scandal."

Jessica Morden.

Newport East MP Jessica Morden

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But Cllr Harvey said she was pressing for clarity on when the new rules would be introduced, and would continue to campaign for expiry dates on gift cards and vouchers to be clearly displayed.

"This is the first step, she said.

"I am still arguing gift vouchers should have their use by dates on the front so everyone can see them, not hidden away on the back."