One of the worst bits is that the firm was treating people's money as "working capital", so it was being spent rather than being put aside to pay for the cost of the hampers. The hampers aren't particularly cheap (Park Group's prices (http://www.getpark.co.uk/AgencyOnlineWeb/browsecatalogue) are probably pretty similar), but putting a few pounds aside a week to pay for it is better than going to somewhere like Provident where you can borrow £500 and have to pay back £800.
AFAICS the only advantages of the scheme are (i) economies of scale (ii) if you for some reason can't easily save money any other way (which I appreciate isn't necessarily a simple question of willpower in all cases).
Feeding the money into the firm's general cash reserves would be fair enough if they'd actually been able to meet their promises; had it been some more financially secure firm (a big supermarket, say) running the operation then the fact that the cash wasn't isolated wouldn't have been a problem (and they'd probably be in a better position to get some return on the cash in the mean time, pushing the price down - or the profit up - a bit).
FarePak is - or was - a form of financing for the poor; a closer look at the clientele will show you that many of them are 'unbanked' and about half will have resorted to loansharks and pawnshops in any given year. For many clients, it was the only savings scheme they have ever used - or indeed have access to.
The word, in American English, is redlined.
Ed Vaizey, MP for Wantage, said he was 'unhappy' about the rules governing clubs such as Farepak. "They're not considered financial products so the Financial Services Authority doesn't regulate them," he said... A perceptive comment, from a man who knows some history and a little finance: EHR (European Home Retailing, the parent company) and all the Christmas hamper clubs that it took over have a long, long history. They are successors to the Friendly Societies (including, most famously, funeral and life-assurance funds) that began as self-help movements in the nineteenth century.
HBoS might want to look at its own early history again, and ask why those movements started, all the mutual societies and credit unions and provident associations: not all of them were 'building societies' for the mutual assistance of the middle classes of, say, Halifax - some of them existed to help people who were every bit as excluded as the marginalised and vulnerable labourers, cleaners and single mothers of today.
What does it say about HBoS that they are so hostile to these people? A mildly cynical observer might say that FarePak was a competitor to the High Street banks and that a conflict of interest has led to this ruthless but commercially-sound decision. But if you look at how these things are done in 'real' banking, the failed institution's accounts are scooped up by the victor and it's the shareholders, bondholders and middle managers who come out as losers. Why should EHR be any different? Aren't they real - or potential - customers and savings-account holders?
The unpalatable truth is that HBoS - and the rest of the retail banks - do not want these low-income council tenants and hostel-dwellers, with their temporary jobs and rented housing and their patchy credit history. Whatever you may have heard about 'social inclusion' and 'basic accounts' and extending the banking system to deprived areas, the banks do not want to touch these people.
Maybe they shouldn't: maybe, in the harsh world of capitalism, the banks are right to remember that there is a duty of prudence, and that the preservation of their shareholders' funds - and, for that matter, their savers and account-holders - must take precedence. Politicians cannot and should not force a private business to take on unprofitable work, and would do well to find better bogeymen to blame for the activities of loan-sharks who are - however unpleasantly - providing a service that the poorest people in the country desperately need.
But I'd like to hear less publicity material from the banks about how 'caring' and inclusive and modern they are, when their business practices leave so many people excluded and in such desperate financial trouble. Washing your hands of the poor doesn't make you clean.
But let's focus on specifics, and on HBoS: not only are they passively acquiescing in the exclusion of the poor, they have actively screwed them over in their handling of the FarePak bankruptcy. The £2M donation to the hardship fund doesn't make a difference: even if it was enough, and applied in time to put it right for the losers - and it doesn't, and they know it - charity doesn't right wrongs.
Today, on p2, I think. I think it's a regular round-up of quotes from blogs on a particular subject, and today's was Farepak. So far as I can tell it isn't included on the website. Perhaps I overstate by saying it was attributed to you, but it was attributed to "ewx.livejournal.com" and I drew the obvious conclusion.
That's OK - All my opinions are regurgitated from the Financial Times and Wall Street Journal.
Besides, who cares? All those Grauniadiators are closet Daily Mail readers. They'd be Daily Mail writers if they could spell. Why else would we be so often in agreement?
One of the worst bits is that the firm was treating people's money as "working capital", so it was being spent rather than being put aside to pay for the cost of the hampers. The hampers aren't particularly cheap (Park Group's prices are probably pretty similar), but putting a few pounds aside a week to pay for it is better than going to somewhere like Provident where you can borrow £500 and have to pay back £800.
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
(no subject)
Date: 2006-11-12 10:48 am (UTC)(no subject)
Date: 2006-11-12 03:24 pm (UTC)Still gambling with over people's money though, isn't it?
(no subject)
Date: 2006-11-12 04:54 pm (UTC)(no subject)
Date: 2006-11-12 05:12 pm (UTC)AFAICS the only advantages of the scheme are (i) economies of scale (ii) if you for some reason can't easily save money any other way (which I appreciate isn't necessarily a simple question of willpower in all cases).
Feeding the money into the firm's general cash reserves would be fair enough if they'd actually been able to meet their promises; had it been some more financially secure firm (a big supermarket, say) running the operation then the fact that the cash wasn't isolated wouldn't have been a problem (and they'd probably be in a better position to get some return on the cash in the mean time, pushing the price down - or the profit up - a bit).
(no subject)
Date: 2006-11-12 06:41 pm (UTC)FarePak is - or was - a form of financing for the poor; a closer look at the clientele will show you that many of them are 'unbanked' and about half will have resorted to loansharks and pawnshops in any given year. For many clients, it was the only savings scheme they have ever used - or indeed have access to.
The word, in American English, is redlined.
Ed Vaizey, MP for Wantage, said he was 'unhappy' about the rules governing clubs such as Farepak. "They're not considered financial products so the Financial Services Authority doesn't regulate them," he said... A perceptive comment, from a man who knows some history and a little finance: EHR (European Home Retailing, the parent company) and all the Christmas hamper clubs that it took over have a long, long history. They are successors to the Friendly Societies (including, most famously, funeral and life-assurance funds) that began as self-help movements in the nineteenth century.
HBoS might want to look at its own early history again, and ask why those movements started, all the mutual societies and credit unions and provident associations: not all of them were 'building societies' for the mutual assistance of the middle classes of, say, Halifax - some of them existed to help people who were every bit as excluded as the marginalised and vulnerable labourers, cleaners and single mothers of today.
What does it say about HBoS that they are so hostile to these people? A mildly cynical observer might say that FarePak was a competitor to the High Street banks and that a conflict of interest has led to this ruthless but commercially-sound decision. But if you look at how these things are done in 'real' banking, the failed institution's accounts are scooped up by the victor and it's the shareholders, bondholders and middle managers who come out as losers. Why should EHR be any different? Aren't they real - or potential - customers and savings-account holders?
The unpalatable truth is that HBoS - and the rest of the retail banks - do not want these low-income council tenants and hostel-dwellers, with their temporary jobs and rented housing and their patchy credit history. Whatever you may have heard about 'social inclusion' and 'basic accounts' and extending the banking system to deprived areas, the banks do not want to touch these people.
Maybe they shouldn't: maybe, in the harsh world of capitalism, the banks are right to remember that there is a duty of prudence, and that the preservation of their shareholders' funds - and, for that matter, their savers and account-holders - must take precedence. Politicians cannot and should not force a private business to take on unprofitable work, and would do well to find better bogeymen to blame for the activities of loan-sharks who are - however unpleasantly - providing a service that the poorest people in the country desperately need.
But I'd like to hear less publicity material from the banks about how 'caring' and inclusive and modern they are, when their business practices leave so many people excluded and in such desperate financial trouble. Washing your hands of the poor doesn't make you clean.
But let's focus on specifics, and on HBoS: not only are they passively acquiescing in the exclusion of the poor, they have actively screwed them over in their handling of the FarePak bankruptcy. The £2M donation to the hardship fund doesn't make a difference: even if it was enough, and applied in time to put it right for the losers - and it doesn't, and they know it - charity doesn't right wrongs.
(no subject)
Date: 2006-11-12 07:04 pm (UTC)(no subject)
Date: 2006-11-15 01:42 pm (UTC)(no subject)
Date: 2006-11-15 05:49 pm (UTC)(no subject)
Date: 2006-11-15 06:17 pm (UTC)(no subject)
Date: 2006-11-15 07:06 pm (UTC)(no subject)
Date: 2006-11-15 11:49 pm (UTC)(no subject)
Date: 2006-11-16 03:53 pm (UTC)Besides, who cares? All those Grauniadiators are closet Daily Mail readers. They'd be Daily Mail writers if they could spell. Why else would we be so often in agreement?
(no subject)
Date: 2007-06-26 01:49 am (UTC)How sad!
One of the worst bits is that the firm was treating people's money as "working capital", so it was being spent rather than being put aside to pay for the cost of the hampers. The hampers aren't particularly cheap (Park Group's prices are probably pretty similar), but putting a few pounds aside a week to pay for it is better than going to somewhere like Provident where you can borrow £500 and have to pay back £800.
Very well said!