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Banks must do more: MP.

Byline: By Dave Black

A Northumberland MP is urging Britain's big banks to do more to help victims of the collapse of Christmas hamper firm Farepak.

Wansbeck MP Denis Murphy has personally contacted bosses at Barclays, Lloyds TSB and Halifax Bank of Scotland, asking them to consider reimbursing customers who paid in money by cheque.

He says customers who made payments to the Farepak savings scheme backed by cheque guarantee cards should be entitled to protection, and says the banks have a moral responsibility towards them.

The emergency fund launched to help those who lost savings when the company went into administration closed its helplines this week, having raised pounds 6.3m.

The Government is investigating the Farepak collapse, which is believed to have affected at least 150,000 and possibly up to 300,000 people.

Mr Murphy said yesterday he believed hundreds of people in his constituency had lost money ( up to pounds 1,000 each.

"A lot of people have contacted me about this and many have paid by cheque over nine months. I have spoken to Barclays, Lloyds TSB and HBOS and suggested that these cheques should have been covered by cheque guarantee cards, so surely there is some protection for these people.

"I am awaiting their response, but I believe these big banks should accept more responsibility. These people have used bank cheques to pay for goods and services they have not received.

"Some Farepak customers have already had their money back because they paid with credit or debit cards.

"If the banks agreed to reimburse customers who paid by cheque it would leave more in the emergency fund for the thousands who paid by cash."

MPs have already called on HBOS, which handled Farepak's accounts, to dig deeper into its pockets, claiming its pounds 2m donation to the fund was insufficient.

Trade secretary Ian McCartney announced that pounds 6.3m had been donated by businesses, politicians and the public, with the money due to be distributed through shopping vouchers to 25,000 ex-Farepak agents from next week.

Free hampers may also be sent to customers who had ordered food.

The Journal told yesterday how families who lost their money in the Farepak collapse are set to get as little as pounds 25 compensation in the run-up to Christmas.

The pounds 6.3m emergency fund has 25,000 agents to compensate ( who in turn could have more than 10 customers each ( the average family may get just pounds 25 each, despite investing more than pounds 40m between them.

The fund had hoped to raise pounds 10m, with MPs even urged to donate a day's salary ( equivalent to pounds 165 for a backbench politician.
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Publication:The Journal (Newcastle, England)
Date:Dec 2, 2006
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