• When firm went into administration cash was used towards repaying the bank's 31million loan


Anger: Thousands of Farepak Christmas hamper customers were cheated out of justice yesterday

Anger: Thousands of Farepak Christmas hamper customers were cheated out of justice yesterday

Thousands of customers who lost money in the Farepak Christmas hamper firm scandal were cheated out of justice yesterday.

As a high-profile court case against the directors of the failed firm collapsed, it emerged that bankers had referred to customers' cash as 'Doris money'.

It was also revealed that bankers, HBOS, twice refused to protect 4million saved by customers, mainly on low incomes, to buy a hamper.

The Insolvency Service abandoned its five-year Farepak investigation after extraordinary new evidence showed that HBOS turned down the option of placing the money in a trust.

This meant that when the firm collapsed into administration in  2006 the cash was used towards repaying the bank's 31million loan rather than refunded to Farepak's vulnerable customers, many of  them elderly.

More than 150,000 customers who had paid regular instalments for a Christmas hamper were left on average 400 out of pocket and offered just 15p in the pound.

Hugely embarrassing emails from senior bankers at HBOS, which is now owned by Lloyds Banking Group, showed they referred to the cash from Farepak's vulnerable customers as 'Doris money'.

The new evidence will heap further pressure on Peter Cummings, known as the banker to the stars of the financial world, who was handed a 'warning notice' and punitive fine by the Financial Services Authority in April as part of its investigation into HBOS.

It has been reported that  Mr Cummings, who is challenging the FSA's rebuke, had been the  'ultimate arbiter' of what happened with Farepak.

This is the second collapse of a case brought by a government department this week – the Insolvency Service falls under the responsibility of the Department of Business.

Rich pickings: When the firm went into administration in 2006 the cash was used towards repaying the bank's 31million loan not vulnerable customers

Rich pickings: When the firm went into administration in 2006 the cash was used towards repaying the bank's 31million loan not vulnerable customers

On Monday the Serious Fraud Office dropped its investigation into property tycoon Vincent Tchenguiz.

On Farepak, lawyers representing the Insolvency Service had asked Mr Justice Peter Smith in the High Court to disqualify its former bosses from being company directors, accusing them of 'unfit conduct'.

The former bosses, including  Sir Clive Thompson, an ex-president of the Confederation of British Industry, contested the disqualification applications.

But yesterday the government's companies watchdog abandoned its bid to penalise the directors after the new evidence emerged that included the fact that they had twice tried to protect the cash of customers.

Business Secretary Vince Cable said he felt 'huge' sympathy  for 'those who lost out' and would  reflect on the decision by the  Insolvency Service.

A spokesman for Lloyds Banking Group said: 'As this matter is subject to ongoing legal proceedings, it would be inappropriate to comment.

'We have assisted the relevant authorities at all times during  their investigation of European Home Retail plc and Farepak and the conduct of their directors.'

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If you have any sense and don't want to loose your savings you know what's coming move them now before its to late


Another example of poor banking control instigated by the government.

Like the casino, the bank always wins in the end.

So only us little people that get scr*wed again. It may only be 'Doris money', but those bankers were quick enough to take it when they needed it.

No doubt if a budding entrepreneur now sees a `gap in the market` and wants to set up a similar operation - which will also eventually go bust through incompetent management - Mr Cable will go into his `moan mode` if the banks refuse them a loan of £31m to set up the operation. Remember people WE own HBOS as part of Lloyds; it is OUR money. While I feel desperately sorry for the Farepak customers I own actual shares in Lloyds and my loss when they took on HBOS was thousands not hundreds. Should banks be responsible for all their business customers that go `belly up`? One Andy Hornby was in charge at HBOS when this happened. He walked away with huge sums of money - he gets a massive pension - he is still working and receives a considerable salary. Do not penalise Lloyds today - they had nothing to do with it. It reduces their profits to our detriment. Just take the money from Mr Hornby - the buck should stop with him - he can easily afford it. Any story to bash the banks eh Mail

so as usual, the bank is able to put its own priority first as is always the case they can get their hands into the bank account before anyone else. I still think the Directors should be banned, how can it be right that they carried on collecting cash from customers while they knew the company was not going to be able to pay out at Christmas, its a fundamental offence that they traded while insolvent

Another twist of the knife for farepak victims. HBOS an absolute disgrace. The debt was created at ehr by poor management, and yet they do not even take the stand. This was a constructive insolvency, and had to involve collusion between the board at ehr and HBOS. Cheated. Again.

Banks and Bankers? Don't you just love 'em.

These Banker Bullies are a disgrace.

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