Hampsta calls for revised Christmas hamper rules

Media Release 4 May 2009

Hampsta calls for revised Christmas hamper legislation

Hampsta founder Shane McKillen is calling for an industry-wide overhaul of the multimillion dollar industry after the liquidation of Mrs Christmas. “Both Mrs. Christmas, Chrisco and other hamper businesses trade behind the poorly constructed legislation of the Laybys Act of 1971 that offers no security for customers' money”.

“Hampsta is the only Christmas savings programme that has customers' money held independently in trust, by Public Trust. Hampsta does not have access to the money so our customers' money is truly secure.” says Shane McKillen, founder, Hampsta NZ Limited

Acknowledging that what has happened with Mrs Christmas is very sad, Hampsta is challenging all Christmas hamper companies, including Chrisco, to put all customer money into a proper managed trust structure, such as Public Trust. “This is the only way customers will be guaranteed that their money will be safe,” says McKillen. “Putting the money in an everyday, trading-bank account just doesn’t work in the current market. You only need to look at the recent rash of failures amongst finance companies to confirm this, Chrisco has no right to expose its customers to this kind of risk.”

“Hampsta would be happy to endorse what Chrisco has offered to Mrs Christmas customers but only on the basis that it ensures the security of its customers' money, which currently it does not”. said McKillen.

“This industry needs to be regulated, it needs to have controls, and the players in this market need to be able to demonstrate that customers' money is safe, not at risk if the company goes under,” says McKillen. “History and numerous examples of failures in New Zealand and other countries show that this model simply does not work. The concept of saving for Christmas is a great idea but not under the traditional hamper model using the Layby’s Act”.

“The nature of the transaction involving the purchase of a Christmas Hamper means that the party taking the money is holding customers funds for a long time before delivering the product thus increasing the risk to the customer. Under securities legislation this amounts to raising deposits which requires regulation” according to McKillen.

“Consequently the use of the Laybys Act is inappropriate. Trust or Securities law is the only way to provide security for the funds and ensure that Christmas saving are spent on a happy Christmas for all involved”.

ENDS

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