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'There will never be another Farepak'
'There will never be another Farepak'
Last Modified: 28 Mar 2007
By:
Emily Reuben
That was the government's assurance as it outlined new guidelines for the Christmas savings club industry.
25 thousand people - many of whom were on low incomes - lost hundreds of pounds and their Christmas hampers when Farepak went bust last October.
It was subsequently discovered that the company hadn't ring-fenced savers' money; a scenario, the government insists, which won't be repeated.
Under the new scheme, pre-payments will have to be held in ring-fenced trust accounts. They will be monitored by trustees independent from the companies.
The scheme is similar to one that protects National Lottery funds in the event of Camelot collapsing.
It will be introduced in the coming weeks.
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