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).
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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).