Farepak group 'to press for £10m'

Farepak campaigners are reportedly set to press a bank for an additional £10 million in compensation for customers hit by the collapse of the Christmas hamper business.

Unfairpak will call for another £10 million from HBOS, now part of Lloyds Banking Group, the Mail on Sunday said, despite the bank already paying out £10 million to date, including £8 million last week.

Lloyds made the payment after High Court judge Mr Justice Peter Smith pointed the finger at Farepak's bankers during a hearing in London.

Unfairpak is part of a delegation that will meet business secretary Vince Cable later this week to discuss what the Government could do next.

Proceedings to disqualify the former directors of European Home Retail, which owned Farepak, were thrown out but the judge suggested the bank looked to their morals for further compensation.

HBOS said in a statement last week that it chose to make an ex-gratia payment of £8 million "in the light of recent comments from Mr Justice Smith".

It said it emphasised that HBOS acted legally, but said the group had "wider responsibilities" to the community as well as legal and financial obligations.

The bank previously said its staff "acted entirely appropriately" throughout its relationship with European Home Retail, which also went into administration.

The court heard that following the collapse, claims by customers and "agents" against Farepak amounted to about £37 million.

In 2008, the Government pumped billions into a number of banks, including HBOS, to prevent a financial sector collapse in the wake of an economic crisis.