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 group chief executive of The Co-operative Group, said: “The memory and impact of Farepak’s demise is still felt by many households within the UK. Members of the Farepak Victims Committee have, to their enormous credit, kept the issue of consumer protection alive and I am delighted, 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, said: “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.”