Some customers of the collapsed Christmas saving club Farepak are beginning to be paid, three years after the company went into liquidation.

Payments totalling £240,000 have been sent to 5,900 customers whose money was put into trust by the firm just before it went into administration.

This is after a court was asked to rule whether the trust actually existed and who should be reimbursed. It is claims that were agreed by the court that are being paid.

Around 122,000 customers made claims worth £38 million. Accountants BDO Stoy Hayward says that it has begun paying eligible customers whose payments were received after October 10, 2006.

Those who placed their orders before that date are not covered by the court’s ruling, and have been told to expect just 5p in the pound.

Customers paid in monthly sums to receive food hampers for Christmas. Victims lost an average £400, with little hope of compensation after the company and its parent European Home Retail collapsed in October 2006.