Link to this page: http://www.socialistparty.org.uk/issue/463/1730
Fraud hits poor at Christmas
THE MILLIONAIRES are falling out. Sir Clive Thompson, director of Farepak Christmas savings club accuses Halifax Bank of Scotland (HBOS - one of Britain's big five banks with £4.8 billion profits last year) of pulling the plug on Farepak's massive overdraft. Over 150,000 low-income families were abandoned and could lose around £40 million.
Farepak told working-class people they'd take the worry out of Christmas. By weekly savings, they promised to cover all the season's costs with vouchers for spending in different stores and a Christmas hamper.
Unfortunately, everything was done for profit by a big business - Farepak was part of European Home Retail (EHR) and its executive director Nicholas Gilodi-Johnson, stands to inherit £75 million.
Thompson himself, now a director of EDF energy, BAT tobacco etc., used to be chief of Rentokil Initial, and president of the CBI, the bosses' 'union'. 'Sir Clive' argued that the minimum wage should be no more than £3.20 an hour (he was on £466 an hour at the time).
In its greed to expand, it looks like EHR stole money from the savers but still could not avoid serious cash-flow problems. When HBOS bank said it was beyond saving, Farepak stopped trading in October. They had collected all the savers' money but sent out no goods and left nothing secured for the savers. EHR went into receivership next day.
Farepak's bosses are all right. Thompson was paid a £100,000 consultancy fee. Chief executive William Rollinson got his £275,000 salary while Gilodi-Johnson took a £445,000 share dividend back to his impressive collection of mansions.
Meanwhile, having committed thousands of pounds to these corporate low-lifes, 150,000 people face a skint Christmas. HBOS failed to protect Farepak's customers. After taking massive amounts from Farepak's overdraft payments, they pulled the plug on the firm.
These companies must not be allowed to walk away. People are being urged to give to a special fund to recompense some families. Multinationals like Tesco, who gain billions from frenetic Christmas spending, have given a pittance.
The culprits must pay, not generous workers who earn little more than Farepak's savers. Socialists fight for the big companies and banks etc. to be taken over and run as part of a planned economy that would act in the interests of working-class people.
At the very least, the campaign to get a fair deal for these savers must fight for HBOS' profits and the Farepak's directors' wealth to be used to reimburse all the money that the savers paid in to these unscrupulous fraudulent companies.
In The Socialist 16 November 2006:
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