Farepak - The wider implications & the injustice

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PRESS RELEASE

CO-OPERATIVE BECOMES FIRST
UK RETAILER TO LAUNCH
PROTECTED CHRISTMAS
SAVINGS SCHEME

Move welcomed by Farepak Victims Committee

The Co-operative Group is to become the first UK retailer to launch a Christmas savings scheme trust, setting a new benchmark in consumer protection following the Farepak collapse.


The new Co-operative scheme, which will be launched in the New Year, will see the implementation of a specifically created trust, giving consumers even greater protection for their Christmas savings. Full details of the scheme will be provided at the time of launch.


Thousands of Co-operative food shoppers save for Christmas by buying £1 stamps during the year which they can cash in when they do their festive shopping. Customers who buy stamps before the new scheme comes into effect, will be able to redeem them as normal.


The Co-operative, which has been working closely with representatives of the Farepak Victims Committee, set up after the Christmas club collapsed in 2006, believes the scheme will set a new standard for other businesses to follow.


The collapse of Farepak in 2006 led to nearly 120,000 people, many from low-income households, losing on average £400 each. Since then both the Office of Fair Trading, through its report on the Farepak debacle, and the Farepak Victims Committee have called upon all businesses operating in this area to improve consumer protection and confidence in such schemes.


Martyn Wates, Deputy Chief Executive of The Co-operative Group, commented: "The memory and impact of Farepak's demise is still felt by many households within the UK. Members of the Farepak Victms Committee have, to their enormous credit, kept the issue of consumer protection alive and I am delighted that, as the UK's biggest consumer-owned business, we have been able to respond in this way.


"Our pioneering approach will give our customers added peace of mind and will set a standard for other businesses to follow".


Deb Harvey, Secretary of the Farepak Victims Committee, commented:


"By putting this new scheme in place, the Co-operative Group really is underlining its care for communities. Both myself and my partner, Louise McDaid, who is committee Chairman, have been working closely with the Group to bring the scheme to fruition and we are overjoyed at the announcement. We have been campaigning for six years because, as former customers and agents, we know only too well of the heartache caused by the Farepak collapse. This is a massive step in the right direction and demonstrates how the Co-operative is putting the customer at the heart of its business".




Ends

Note to Editors:

The Co-operative Group is the UK's largest mutual business, owned not by private shareholders but by our seven million consumers. It is the UK's fifth biggest food retailer and a major financial services provider, operating The Co-operative Bank and the Co-operative Insurance. Among its other businesses are the number one funeral services provider, the third largest pharmacy chain and one of Britain's largest farming operations. As well as having clear financial and operational objectives, the Group has also set out its social and sustainability goals in its groundbreaking Ethical Plan, which specifies over 50 commitments in these areas.

The Group operates 4,800 retail trading outlets, employs more than 100,000 people and has an annual turnover of more than £13bn. Further information is available at www.co-operative.coop

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Farepak auditors face disciplinary action







Ernst & Young - 'Fell short of expected standards'


The auditors of failed Christmas savings firm Farepak face disciplinary action following an investigation.


The Financial Reporting Council (FRC) alleged that Ernst and Young and its auditor Alan Flitcroft fell short of the standards expected.


In particular, one allegation was that they failed to consider Farepak's ability to continue as a going concern. It collapsed in October 2006.


Ernst and Young said it took the matter "extremely seriously".


Mr Flitcroft was the audit partner, and therefore had responsibility for signing off the audit.


Alleged failings


Swindon-based Farepak collapsed, leaving 114,000 people with total losses of £37m. There was no money available to creditors.


However, following a series of legal battles, a final settlement meant customers and agents - often women on low-incomes - received a payment of about 32p in the pound from a compensation fund earlier this year. When added to the 17.5p in the pound given by the Farepak Response Fund charity, set up by the government in 2006, customers received a total of approximately half of what they were owed, according to liquidators BDO.


In parallel, the FRC conducted an investigation into Ernst and Young and Mr Flitcroft, and whether they carried out their work with due skill, care and diligence. Following this, the FRC has alleged that, for the audit of Farepak accounts for the year ending 28 April, 2005, the auditors:


failed to consider events between the date the financial statements were prepared and when they were issued in February 2006.


failed to properly obtain sufficient evidence on which to base their opinion


failed to properly consider Farepak's ability to continue as a going concern, disclosures in the financial statements, and management representations


An independent disciplinary tribunal will now be appointed to hear the FRC's formal complaint. This hearing is not expected until next year.


If it finds against the auditors, the tribunal has a range of possible sanctions including fining the firm and suspending individuals.


A spokesman for Ernst and Young said: "We obviously take these matters extremely seriously, but it would be inappropriate for us to comment further before the tribunal."


The FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK. BBC news coverage here.

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LESSONS LEARNED REVIEW

EMBARGOED UNTIL 1.45PM – 4 DECEMBER 2012


REVIEW OF DISQUALIFICATION PROCEEDINGS TAKEN IN THE CASE OF EUROPEAN HOME RETAIL PLC AND FAREPAK FOOD AND GIFTS LIMITED (“Farepak”)



SUMMARY

There are a number of useful lessons to be learned from the Farepak case, although there was a recognition that all disqualification involves litigation and all litigation involves risk (including examination at trial). The improvements and affirmation of current practice have been annexed to the review. These cover the following areas:-


* Improving the sense and understanding of ownership of the investigation and final affidavit in section 8 disqualification cases


* Increasing the focus on any lessening of the public interest in progressing disqualification proceeding as the case develops and as time elapses


* Strengthening assurance that witnesses are familiar with their evidence, its relevance and significance (including all exhibits) and are clear about the process and what is expected of them, especially where third parties may have prepared or assisted in preparation of affidavits, and where the witnesses may be unfamiliar with giving evidence.


* Whilst it is not the Secretary of State’s role to speculate on what actions directors might have taken, explicit consideration should be given as to how, the defendant ought to have behaved. In the majority of cases the answer may be obvious but nevertheless the exercise may be of value. This may prompt rewording or a recasting of the affidavit and allegations.


* Continuing with the common practice, that Ministers and others are informed regularly of the progress of high profile cases



* Ensuring that the contingent liabilities for cases are reviewed regularly by the audit committee and management board in the Service and regularly communicated through the monthly forecasting process to BIS.


The annex sets out how these can be taken forward.


Whilst recognising the value of the lessons learned, the review is satisfied that there is a suitable process in place for the preparation and authorising of disqualification cases in cases such as Farepak.

The process includes checks and balances, which the review considered were adequate at the time and which, independently, had already been strengthened since the decision to take disqualification proceedings in 2009. These include the fact that the decision to take proceedings is now very clearly independent of the original investigator.

The review is satisfied that the Farepak disqualification properly followed the then existing process and would in any case have been commenced under the new procedures.


There was a recognition that every trial involves risk. However, throughout the disqualification process, the prospect of success was assessed as, at the least, greater than 50%.This continued beyond the commencement of the trial. The decision to discontinue proceedings was taken at the point during the trial when the prospect of success was considered to have fallen below this level.


Legal advice (including from independent counsel) was sought throughout the Farepak litigation and has been sought as part of this review.



INTRODUCTION


European Home Retail plc and Farepak Food And Gifts Limited (one of its subsidiaries) were the subject of a Companies Act section 447 investigation which started in October 2006 and concluded in May 2008. Both companies also went into administration in October 2006. Disqualification proceedings were commenced under section 8 of the Company Directors Disqualification Act in January 2011 and withdrawn in June 2012 after the trial had commenced. The Secretary of State became liable for the legal costs of the defendants. Exceptionally the Judge hearing the case made a statement on 21 June 2012 following the withdrawal of the case , in which he made serious criticisms regarding the proceedings and how they had been conducted. This led to a review being set up by the Insolvency Service looking to examine whether the Farepak disqualification case complied with established procedure , whether changes needed to be made to the way that future disqualification cases were handled and what lessons could be learned from the Farepak case. It was not a review of the investigation which preceded the disqualification proceedings, nor did it purport to encompass wider issues (such as regulation of saving clubs, the position of depositors, etc).


It is also worth recording that this case was conducted under Section 8 of the Company Directors Disqualification Act 1986, which allows for disqualification proceedings to be brought following an investigation under, as in this case, a Companies Act investigation. The vast majority of disqualification cases brought by the Service are under S6 of the CDDA. Both procedures now follow identical procedures (subject to legal distinctions) but at the time there were minor differences in process.


The review panel was set up on 11 July 2012 to provide a forum for reporting compliance (of the Farepak disqualification proceedings) with established disqualification case handling, the extent to which cross cutting changes to the approach to disqualifications are required and the lessons which may be learned from the Farepak case. The review panel was latterly chaired by Pat Boyden, an independent member of the Insolvency Service’s Steering Board and its other members were Robert Burns , the Director of Investigation & Enforcement Services in the Insolvency Service (and the first chair) , Sarah Hodgetts , BIS MF Group , Philip Drye , Head of BIS Internal Audit, Alan Evans , BIS Legal A and David Chapman , Regional Director for Official Receivers London & South East.


The review itself was carried out in two separate strands of work, as follows:

The first strand covered legal and other issues relevant to the conduct of director disqualification proceedings that arose from the Judge’s statement in this case. This part of the review was subdivided into the following areas:-


* What is the status of the Judge’s statement prior to its status being determined by the court

* In the light of the Judge’s Statement, is the Secretary of State’s “duty of fairness” likely to be developed so as to require changes to be made to The Insolvency Service’s current approach to obtaining and producing evidence in disqualification cases?


* What are the other implications of the Judge’s statement for future disqualification cases?


* In particular, what are the implications of the Judge’s comments in paragraphs 41 and 42 and paragraphs 74 and 75 of his Statement on:


- the use of “hearsay” evidence in the Secretary of State’s lead affidavit as opposed to producing that evidence in the form of third party affidavits?


- the preparation and production of third party affidavits?


- the preparation of third party witnesses to give oral evidence at trial?


* Could the policy on evidence production be challenged on the grounds that it is unfair and discriminatory for defendants without substantial means? If so, what is the likelihood of a successful challenge?


* Given the Judge’s comments about [the] volume of evidence, should the Secretary of State be more selective in producing evidence or is it right to produce all of the evidence in the interests of fairness?


* What are the implications of the Judge’s comments in paragraph 33 of his Statement in which he suggests that where the Secretary of State

criticises the actions of directors he should be able to point to any actions that the directors should have taken instead?


* Whether there are any steps that could be taken by the Insolvency Service to mitigate the risk of a successful challenge?


The second strand of the review looked at lessons learned from the conduct of the Farepak disqualification itself:-

* Were the procedures which existed at that time properly applied? If there were departures, were they reasonable and justified?


* If procedures have changed since then, would the new procedures have made any difference?


* The approach taken to assembling and testing the evidence;


* The presentation of the case, particularly the judges; comments about the weight of evidence and balance of viewpoints.


* Stakeholder management – did The Service act appropriately as regards to keeping Ministers and BIS informed, and in our handling of the media?



CONCLUSIONS


The review has concluded that there are useful lessons to be taken from the case (some of which are covered by changes which have already been made in the way in which disqualification cases are handled by the Insolvency Service). The application of these recommendations, together with the changes already instigated should guard against a repetition of criticisms of the sort raised by the Judge in the Farepak case. These changes cover the way in which disqualification cases are handled within the Insolvency Service itself , the way in which cases are progressed in litigation and the way in which the Insolvency Service communicates with its main stakeholders on disqualification cases.


* The review is satisfied that the Judge’s statement does not have any sort of binding legal force. In particular, it is not a judicial decision reached after hearing evidence and argument and having the force of precedent. Although the Judge makes some general comments in his statement about the use and status of hearsay evidence in disqualification proceedings, he fails to make any reference to the leading Court of Appeal authorities or any cases where these matters have been considered. The statement does of course represent the particular views of the Judge himself.


* The review has concluded that for both legal and resourcing reasons there is not a need to obtain direct evidence (as opposed to hearsay (evidence) of all relevant matters at the outset of a case, regardless as to whether it is contested.


* The review has concluded that the practice of the Secretary of State or the Official Receiver relying in the first instance on hearsay evidence is not in any way discriminatory against unrepresented defendants.


* The review has concluded that in respect to the volume of evidence in disqualification proceedings, a “one size fits all” approach to the preparation of evidence in disqualification proceedings is likely to give rise to difficulties. In some cases, considerations of fairness may mean that the entirety of the documents relating to a particular aspect of the company’s operations during a particular period, or relating to a particular issue, will need to be exhibited, so as to ensure that the material put before the Court is not unfairly selective. In other cases, the production of a significant volume of evidence without any prior filtering or selection may be considered to be unfair on the grounds that so much unfiltered information is oppressive and overwhelming for a defendant.


* It is not the Secretary of State’s role to speculate on all the solutions which might have been available, which would inevitably involve a degree of hindsight, and in the majority of cases the answer would be obvious but there may be some value in explicitly anticipating what the defendants might potentially have done, not least to anticipate what lines of defence might be offered, and which might lead to allegations being amended or withdrawn...


* The review has concluded that the Farepak disqualification was handled in line with the procedures which existed at the time that the decision was made to pursue the case in 2009 and were subsequently applied in line with that process. Procedures have been amended since that time with a clearer focus on reviewing the public interest in taking and continuing disqualification proceedings in section 8 disqualification cases (i.e. cases that lead from section 447 Companies Act investigations rather than follow from insolvency proceedings).


* The review considered whether the revised procedures would have made any difference on the progress of the Farepak case. The new procedures may have led to a clearer focus on the public interest in taking and continuing disqualification proceedings. However, it is clear that when disqualification proceedings were issued in 2011 there was confidence that the case for pursuing the litigation remained good. There was also still considerable concern about the failure of the Farepak, most particularly from the savers. It is quite clear that the case would still have been instigated and pursued even had it been dealt with under the revised procedures.

* The review has considered whether there were any undue delays in progressing the case and recognised that the size and complexity of the case made moving quickly very difficult. Following legal advice, significant further effort needed to be put into examining company information/communications after the conclusion of the section 447 report. This took some time before pre trial letters went to the directors in 2009. The delay is understandable but it crosses into the concerns regarding the time that had passed when witnesses prepared their evidence. Similarly it was important to seek representations from the directors and this was also a time consuming exercise. The inevitable delay was recognised and its implications kept under review as there is clearly some risk that public interest may diminish over time, but other public interest considerations led to the case continuing.


* The review has concluded that legal advisors were appropriately engaged in this case.


* The review has examined issues around the presentation of the case, including volume of evidence and preparation of affidavits. The evidence from witnesses was prepared by the Secretary of State’s solicitors in conjunction with the witness or in the case of bank employees by the bank’s solicitors (although there was liaison with the Secretary of State’s solicitors).Undoubtedly the tight timetable between the seeking of witness statements and the deadline for filing them created significant pressure. It has to be noted that the witnesses underwent very challenging questioning from counsel for the defendants and the judge and certainly some of their responses reflect this. The lapse of time since the events had happened made it difficult to sustain any comment made that was not directly evidenced by contemporaneous documentation. If the witnesses had made contemporaneous criticism of the directors but not raised these points with the directors, they were liable to be subjected to close questioning as to why not (some witnesses withdrawing evidence rather than providing an explanation). That said, the evidence was gathered and presented with the support and on the advice of legal advisers who had considerable knowledge and expertise in the requirements of the appropriate manner in which to gather and present evidence. The review has not found any indication that there was concern at the time of the gathering of the evidence (or at any other point) that ethical and professional standards were in any way being compromised.


* The review has also considered the manner in which stakeholders were kept informed of the proceedings and their development – in general terms stakeholders were kept informed but there are improvements that could be made in the way in which they are kept informed in similar cases in the future, in particular the manner in which regular updates are provided and the way in which information of contingent liabilities is passed.







Annex – Lessons Learn and Affirmation of current practice

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LESSONS LEARNED REVIEW

EMBARGOED UNTIL 1.45PM – 4 DECEMBER 2012

FAREPAK DISQUALIFICATION – RECOMMENDATIONS/ AFFIRMATION OF CURRENT PRACTICE


INSOLVENCY SERVICE – INVESTIGATION & ENFORCEMENT TEAM

Recommendations/affirmation of current practice How we will take forward


1. Improve the sense and understanding of ownership of the investigation and final affidavit in section 8 disqualification cases The Service will review the process by which section 8 disqualification cases are handled to ensure that a) ownership of the disqualification proceedings is clearly understood and assigned b) the evidence requirements for the disqualification (as opposed to the section 447 report) are clearly understood and assigned. c) the responsibility of each director for the conduct complained of is clearly understood and evidenced.

2 Increase the focus on any lessening of the public interest in progressing disqualification proceeding as the case develops and as time elapses. The Service will introduce a more structured process whereby decisions at key points (for example receipt of defences, withdrawal of allegations, decisions to proceed/discontinue etc) are recorded in a structured way which demonstrates the public interest of that decision. The time elapsed will be part of that consideration.

3. Strengthening assurance that witnesses are familiar with their evidence, its relevance and significance (including all exhibits) and are clear about the a)Any likely issues regarding the availability of witnesses will be highlighted prior to proceedings being considered. b) Witnesses will continue to be appropriately supported process and what is expected of them, especially where third parties my have prepared or assisted in preparation of affidavits and where witnesses may be unfamiliar with giving evidence. through the process with a new system of confirmation in place c) Solicitors will continue to ensure that witnesses are familiar with their affidavits and exhibits and what is expected of them during the trial with a new system of confirmation in place.

4. Whilst it is not the Secretary of State’s role to speculate on what actions directors might have taken, explicit consideration should be given as to how the defendant ought to have behaved. In the majority of cases the answer may be obvious but nevertheless the exercise may be of value. This may prompt rewording or a recasting of the affidavit and allegations. This will be added to guidance and considered during the process. It is not suggested that this be added into the affidavit itself.

5. Continuing with the common practice that Ministers and others are informed regularly of the progress of high profile cases On high profile cases that have clear Ministerial/public/media interest a regular 'for information' light touch progress update will be provided to BIS, Ministerial offices and press office

6. Ensure that the contingent liabilities for cases are reviewed regularly by the audit committee and management board in the Service and regularly communicated through the monthly forecasting process to BIS. The Service will produce a register for cases that have incurred significant cost or have the likelihood of significant adverse costs

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FAREPAK VICTIMS COMMITTEE PRESS RELEASE

Deborah Harvey and Louise McDaid along with M.P’s Jessica Morden, Katy Clark, Yvonne Forague, Jo Swinson and other departments met with Dr Vince Cable to discuss the Lessons Learnt Review regarding the recent collapse of the Farepak./EHR Director Disqualification court case.

We held detailed conversations regarding Regulations, Protection of Prepaid deposits, Insolvency, HBOS, the Retail Consortium and The Co-operative’s launch of their protected Christmas Savings scheme in January 2013.

As a general view when the Government take a directors disqualification to court they have a 90% success rate, in this instance unfortunately this did not happen. It came at a public cost of £6 Million.

Forward looking, in respect of Insolvency there is a need for reform and a look at how the fees add up (In the case of Farepak the dividend paid out after the administration/liquidation fee of over £10M was 13p/£). The need to examine the Insolvency Practitioners Fees and the dividend paid out to creditors will be looked at by Mr Cable's department with the view of bringing in regulations.

Mr Cable is also going to chase up the letter he has sent to HBOS for their response, more on that to follow.

The Farepak Victims Committee are extremely pleased with how the meeting went. Both Deborah and Louise were unable to attend in person so BIS arranged for them to participate via a conference call.

Mr Cable congratulated the pioneering scheme being launched by the Co-operative and stated that he and Ms Swinson would be more than willing to assist in any public events to promote it. He hopes that others will come on board and intends to talk with the Retail Consortium suggesting that customers needed better protection when prepaying.

We are over the moon with this as we have worked very closely with The Co-op in particular with Mr Waqas Butt, who has worked just as hard to bring our idea to a reality.

With BIS looking at Fees, Regulations, Protecting Deposits and Insolvency we feel that we have had a very successful meeting, we will continue to work for the benefit of all consumers.

Further meetings with Dr Cable's department will be scheduled and we hope to keep you updated.

Our campaign continues.

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FRC files formal complaint against Farepak director

THE FINANCIAL WATCHDOG has filed a disciplinary formal complaint against the chief executive of Farepak's parent company.

The Financial Reporting Council (FRC) made the complaint to its disciplinary arm against William Rollason, with a hearing likely to take place in the first half of next year.

Further reading

E&Y faces formal complaint over Farepak audit
BDO liquidators to return 50% of debt to Farepak creditors
Farepak administrators attacked by MP for ’raking in’ customer cash ICAEW qualified accountant Rollason is accused of failing to act in accordance with the institute's ethical code and allowing his conduct to fall short of the standards expected of members.

Rollason joined Farepak's parent company European Home Retail (EHR) in 2003 as chief executive also taking a board role at the Christmas savings business Farepak.

However, he faces allegations from the FRC that he misled fellow directors on the financial position of EHR and its ability to support Farepak as its liabilities fell due. He is also accused of signing off on financial statements which he knew were misleading in 2005.

Farepak collapsed in 2006, depriving more than 100,000 customers of their Christmas savings. A case against the directors brought by the Insolvency Service, earlier this year, collapsed after the presiding judge blamed Farepak's bank, HBoS, and not the directors. The bank, now Lloyds, donated £8m to the Farepak compensation scheme.

E&Y are facing similar proceedings from the FRC for its role as auditor in Farepak; its case is also likely to be heard in the first half of next year.



Read more: www.accountancyage.com/aa/news/2231084/frc-files-formal-complaint-against-farepak-director#ixzz2ElsrP9Ww

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GOVERNMENT ANNOUNCE AN INSOLVENCY REVIEW
First we will publish the letter that the Farepak Victims Committee sent to Neil Smart from the Office of Fair Trading:

Dear Neil,

This is our final letter and it is regarding the Insolvency Service and the laws that govern them. I have enclosed a document called:Insolvency Practitioners are Poorly Regulated, says Expert. This document was written by Mr Allan Urry (File on 4)

“Stephen Hunt’s work offers a rare insight into the darker side of insolvency”.

At the end of this document the following is written:

The OFT has recommended far reaching reforms of the regulatory regime to the Government, which is expected to respond by the end of the month.

This was back in October 2010, so I imagine you would have a more up to date document on how the Government felt.

Take Farepak, I made a formal written complaint about Martha Thompson of BDO with respect of the time it was taking and the actual costs that were being accrued. I was told that I had to make my complaint in writing to her institute in Ireland. I did this and Thompson was quite rightly allowed to answer, then I was allowed to respond once more. The complaints panel found in Ms Thompsons favour and as their had been ‘no prima-facie case’ to answer, however I was given up to 3 months to appeal. After going over everything and reading things again and again I decided to appeal. What I received in reply was nothing less than another Chartered Accountant pretty much insulting my intelligence and ridiculing my initial complaint. This whole sorry affair took around 12 months to get from beginning to end. Needless to say I have absolutely no faith in the current system, I would go so far as to say it is a joke.

The whole system is long overdue for an overhaul.

Farepak and BDO Martha Thompson’s final accounts amount to £9,846,505.
To realise just £5.5 Million for creditors, it needs to be looked at as it is self-regulated which means it may as well be un-regulated.

Kind Regards

Deb Harvey & Louise McDaid

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This is the response received today:


Insolvency Practitioner Regulation Section
4th Floor
... 4 Abbey Orchard Street
London
London SW1P 2HT

Dear Deb and Louise

I write further to your letter dated 1 November to Neil Smart at the OFT concerning the Government’s response to their report about insolvency practitioners and your complaint about Martha Thompson, one of the joint liquidators of Farepak.

I have been asked to respond on behalf of The Service as I deal with matters relating to the regulation of the insolvency profession. It is a particularly opportune moment to be replying to the first aspect raised as the Government announced yesterday an insolvency fees review and a radical reform to the way complaints against insolvency practitioners are handled by industry regulators. I have decided to provide a link to the press notice issued in respect of this, rather than setting out all of the changes in this letter:-

insolvency.presscentre.com/Press-Releases/Jo-Swinson-announces-insolvency-fees-review-and-single-complaints-gateway-6853e.aspx

In light of your concerns about the formal complaint lodged about Martha Thompson with the Institute of Chartered Accountants in Ireland (ICAI), it may assist if I explain the regulatory regime in place for insolvency practitioners.

The system of regulation is one of Government monitored self-regulation. Therefore the Insolvency Service does not have the authority to investigate the conduct of one of the members of a recognised professional body (RPB) – such as the (ICAI). The Service’s remit in acting on behalf of the Secretary of State in his regulatory oversight capacity is to ensure that the RPBs effectively maintain and enforce rules to ensure that the insolvency practitioners they regulate are fit and proper persons so to act.

Each RPB must therefore have in place – and maintain – an accessible, effective, fair and transparent procedure for dealing with complaints against practitioners authorised by them. Where there are concerns about how an RPB has investigated a complaint, The Service can examine claims that an RPB’s procedures are inadequate or that they have not followed their published complaints procedure. This, however, can only be undertaken once the RPB’s complaints process has been exhausted.

I have been in contact with the Chartered Accountants Regulatory Board, a body established by the ICAI to regulate its members, to obtain confirmation that their complaints process has been completed. They have confirmed that this matter has been through their final tier in the complaints process – the Independent Reviewer - who considered the matter in May 2011 and found no prima facie case to answer.

In light of the above, I would be grateful if you could indicate whether you wish The Service to commence such a review.

Yours sincerely

Steve Lamb
Insolvency Practitioner Regulation Section

OUR ANSWER WILL BE OF COURSE YES

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Happy New Year to all especially Nick. Big thank you to everyone who has supported us. Our fight for better consumer protection continues so please keep supporting us.

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THE CO-OPERATIVE LAUNCHES PIONEERING NEW CHRISTMAS SAVINGS TRUST WITH STAMP OF APPROVAL FROM FAREPAK VICTIMS

The Co-operative Group has today (Monday 28 January 2013) launched a pioneering new savings scheme trust, becoming the first retailer to protect customers paying into a saving stamps scheme.

The trust, which sets a new benchmark in consumer protection following the Farepak collapse, has been created to provide additional security to thousands of Co-operative Food customers using the scheme, many of whom buy stamps to help spread the cost of Christmas.

Customers’ money will be transferred into a trust account (managed by an independent trustee), which will provide protection for their funds. There is heightened interest in such schemes against the backdrop of a retail environment where a number of high-street names have collapsed, leaving their customers out of pocket.

The Co-operative has been working closely on the new scheme with representatives of the Farepak Victims Committee, set up after the Christmas club collapsed in 2006 and leading to nearly 120,000 people, many from low-income households, losing on average £400 each.

According to figures from The Co-operative, 12% of people have already started saving for Christmas 2013, and using saving stamps is a popular and easy way for shoppers to spread the cost.

Co-operative customers can buy £1 stamps throughout the year, putting a little away each month, and anyone redeeming a full saving stamps book (with £48 worth of stamps) in December will also receive an extra £2 bonus.

Martyn Wates, Deputy Chief Executive, The Co-operative Group, said: “As the UK’s biggest consumer-owned business, and a trusted and responsible community retailer, I’m pleased that we have been able to respond to the Farepak Victims Committee’s request for a trust fund, and I believe this initiative will give our customers extra peace of mind, setting a new standard for other businesses to follow.”

Deborah Harvey and Louise McDaid Secretary and Chair of Farepak Victims Committee said: “We are over the moon that this scheme is now ready for launch. With the recent collapse of a number of firms and the scandal of the vouchers not being honoured, we feel this launch proves that The Co-operative really have their customers at the very top of their priorities. This scheme will protect the consumer and importantly protect the Christmas savings of thousands of hard pressed families.

“The Co-operative has joined us in pioneering this scheme right across the country and we are very proud that they have not only listened, but acted on everything we requested of them. To see an idea discussed over the phone by two friends from opposite ends of the country actually coming to fruition with a £13 Billion Company is very humbling indeed. We would like to thank The Co-operative for doing what they do best and that is ‘putting the consumer first’. They are the only major retailer to do this, any Christmas savings stamps etc in any of the other supermarkets still remain unprotected. We fully support and endorse The Co-operative and we recommend that for this, and every other Christmas, The Co-op is the only place to save.”

For more information, shoppers can visit www.co-operativefood.co.uk/savingstamps or contact The Co-operative Customer Careline on (freephone) 0800 0686 727

- ends - [/size]
* According to a survey conducted, on behalf of The Co-operative Group, by OnePoll, with a geographically representative sample of 2,000 respondents in October 2012

Notes to Editors:
Other Co-operative societies participating in the saving stamps trust fund:

The Midcounties Co-operative Society
Coniston Co-operative Society
Radstock Co-operative Society
Tamworth Co-operative Society
Anglia Regional Co-operative Society
Heart of England Co-operative Society
East of England Co-operative Society
Wooldale Co-operative Society
Clydebank Co-operative Society
The Southern Co-operative Society

The Co-operative Group
The Co-operative Group is the UK’s largest mutual business, owned not by private shareholders but by over seven million consumers. It is the UK’s fifth biggest food retailer and a major financial services provider, operating The Co-operative Bank and The Co-operative Insurance. Among its other businesses are the number one funeral services provider, the third largest pharmacy chain and one of Britain’s largest farming operations. As well as having clear financial and operational objectives, the Group has also set out its social and sustainability goals in its groundbreaking Ethical Plan, which specifies over 50 commitments in these areas.

The Group operates 4,800 retail trading outlets, employs more than 100,000 people and has an annual turnover of more than £13bn. Further information is available at www.co-operative.coop

[louise1mcdaid]

Can you please contact you local MP asking them to support Early Day Motion 997 which calls for better protection of the Prepayment Industry ie Vouchers/Gift Cards. Thank you again for your continuing support (especially Nick xxxx)

CO-OPERATIVE PROTECTED SAVINGS AND PREPAYMENT REGULATION

Session: 2012-13

Date tabled: 30.01.2013

Primary sponsor: Clark, Katy
Sponsors: Morden, JessicaRussell, Bob

That this House congratulates the Co-operative Group on being the first major supermarket to set up a protected savings stamps scheme in 2013; further congratulates the work of Louise McDaid, the Chairperson and Deborah Harvey the Secretary of the Farepak Victims Committee, now the Safeguard All Savings campaign, for the work they have done to campaign for justice for those affected by the Farepak collapse, better consumer protection for savers and the work they have undertaken with the Co-operative in developing the scheme; calls on Tesco, Asda, Morrisons, Sainsbury's, Iceland and other retailers to follow the Co-operative's example and ensure consumer protection for their supermarket prepayment savings schemes; expresses concern that over six years on from the collapse of Farepak the vast majority of prepayment purchases remain unprotected by law including gift vouchers and credit notes; notes that 4 billion of gift vouchers are sold every year with no consumer protection and that 20 per cent of these remain unused; and further calls on the Government to bring forward proposals similar to those made by the 2009 Consumer Focus report Pay Now, Pay Later to regulate the whole of the prepayment sector in order to better protect consumer savings and payments.

[louise1mcdaid]

Another Early Day Motion with primary sponsor Fiona O'Donnell MP calling for better consumer protection when company goes into administration, including honouring Vouchers/Gift Cards.

Worth noting that HMV in Ireland did not honour Vouchers/Gift Cards.


HMV AND CONSUMER PROTECTION

•Session: 2012-13
•Date tabled: 22.01.2013
•Primary sponsor: O'Donnell, Fiona
•Sponsors:

◦Durkan, Mark
◦Gilmore, Sheila
◦McKenzie, Iain
◦Ritchie, Margaret
◦Russell, Bob
That this House welcomes the decision by HMV and their administrators to reconsider their position on accepting gift cards and vouchers; notes that experts believe consumers would probably have lost at least 100 million in HMV gift cards and vouchers if the original decision not to accept them had not been reversed; agrees with the recent comments of consumer experts and campaigners that this situation has again highlighted the need for better legal protection for consumers; and urges the Government to explore how it can change the law to increase protection for consumers when companies go into administration, including honouring gift cards and vouchers.

PLEASE GET YOUR MP TO SIGN THANK YOU

www.parliament.uk/edm/2012-13/955

[louise1mcdaid]

If you are an Agent for a Catalogue, then please make sure you get each of your customers to sign an individual Credit Agreement! If you don't then even if a customer dies you as Agent will be liable for the debt.

We have been informed of a number of Agents who for one reason or another have been left with the debt.

We have been in touch with CAB who have confirmed that they have also dealt with a number of complaints!

www.bdl.org.uk/images/27_SCOT_Catalogue%20Debts.pdf