Farepak single mother remortgages her home to pay back savers

Alison Berry, 33, was so upset that her friends and neighbours lost out when the company went under that she borrowed almost £4,000 against her home.

The mother-of-two, who worked as an agent for the savings company, has since taken on two nursing jobs to ensure she keeps up with the mortgage re-payments.

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"A lot of my customers were close friends, or people I had known for years, and I felt responsible," Mrs Berry, of Wigan, Greater Manchester, said.

"I re-mortgaged my home and it has put me in a difficult position, but I had to do it."

Mrs Berry was collecting money from nine of her friends, neighbours and family when Farepak collapsed 12 months ago.

The firm, which allowed people to save for festive hampers and vouchers, left an estimated 150,000 savers nationwide £40 million out of pocket when it went into administration.

Mrs Berry, who is raising her two children, six-year-old Katherine and 11-year-old Matthew, on her own, offered to compensate all of her customers.

But some refused her kind offer after realising she was not to blame.

So far she has shelled out £3,370 from her own bank account and has told her offspring all luxuries, such as family trips to the cinema, are on hold until she has paid the cash back.

Mrs Berry's act of generosity emerged days after the Farepak creditors' committee warned that no compensation payments were likely to be made to savers before this Christmas.

Customers have been warned that, in any event, they are likely to receive just five pence for every pound they saved with the company.

This means a typical saver, who paid in around £400, will receive just £20.

Mrs Berry said she hoped the directors of Farepak would eventually face legal action as a result of the collapse of the firm.

She said: "It has taken too long. There's going to be another Christmas gone by and had I not done what I've done with my customers they would still be waiting.

"I would be disgusted if there was to be no legal action."

Among the customers Mrs Berry offered to compensate was Sue Smith, 40, from Standish, Wigan, who lost £350.

"I refused to take Alison's money as I did not believe that it was her responsibility," Mrs Smith said.

"But for many people the money Alison paid out of her own pocket was a lifeline.

"I'm still very angry with Farepak and feel that they have a moral duty to fully compensate their victims."

Administrators BDO Stoy Hayward moved the company into liquidation last week.

They have pledged to carry out a detailed investigation into the reasons for the collapse and to examine whether any individuals should be prosecuted.

Suzy Hall, who is campaign co-ordinator with customers' group Unfairpak (crt), and sits on the creditors' committee, praised Mrs Berry's commitment to her customers.

"It is exceptional to find someone doing this," she said.

"Agents felt very guilty because they were the ones taking the payments. But it had nothing to do with them. They couldn't have predicted what happened.

"What people really want to know is what happened to their money. Now that the liquidator is in position, he can investigate the collapse and if there is any evidence of wrongdoing then action can be taken."