Bassetlaw MP John Mann has welcomed the Pomeroy Report into Christmas savings schemes, which was published today. The report is the first of three to conclude following the collapse of the Farepak savings scheme just before Christmas last year. The report was led by Brian Pomeroy, the Chairman of the Financial Inclusion Task Force. The reports main findings conclude that Christmas savings schemes are popular with consumers, and therefore money paid into them should be properly protected.

One key measure proposed is that such schemes ring fence money paid in independent trust funds. This would protect funds and stop money being used by companies for other purposes, such as was the case with Farepak where customers money was being used to pay off interest payments. These types of trusts are used commonly to protect funds, including the National Lottery prize funds.

The report also encourages local credit unions to compete more in this market, and also suggests that the Government should launch a campaign promoting safe savings options following the Farepak collapse.

This particular report does not look at the actual reasons behind the collapse of Farepak; the events which led to last winter’s crisis and future regulation of the hamper industry are being investigated by the Department of Trade & Industry and the Office of Fair Trading. There will be further reports later this year when those investigations are complete.

John Mann MP said:

“Today’s report is a step in the right direction and makes some common sense proposals. Any money paid into any savings scheme of any type should be fully protected with proper safeguards in place. This is something that needs to be looked at in detail and where action needs to be taken to make sure companies cannot find any loopholes which could lead to a repeat of the Farepak situation.”

“More needs to be done to promote other safe savings options including credit unions. I have a safe savings information page on my website with credit union information where people can learn more about their local credit union.”

“I am waiting for the further reports on the Farepak collapse where I suspect more proposals will be brought forward to protect people saving in schemes like Farepak. We do not want to see anything like we saw last Christmas ever again and I have made that clear to the Government.”

Following the collapse of Farepak last year John Mann launched the Bassetlaw Farepak Appeal which was backed by local councillors, businesses, churches and individuals.

You can find out more about safe savings and credit unions here.

You can find out more about the Bassetlaw Farepak Appeal here.