Politicians have now insisted strenuous efforts be taken to ease the financial pain faced by such families.

Perth MSP Roseanna Cunningham said the failure of Farepak was sending many into a “spiral of debt” and urged public bodies — including housing associations — to intervene.

“I have already heard of people who have resorted to moneylenders to get them through the next few months,” she remarked. “I feared as much.

“The discussion in Parliament of a charitable fund reminds us of the impact the collapse must be having right now.”

The MSP claims hundreds of Scots are being forced to face up to the Christmas holidays with nothing but debt on their minds.

She said, “Investigations and possible future regulation are all very well, but they will not help the people who are struggling in the run-up to Christmas this year.

“I have major concerns about the response of various public bodies to what is an all-too-predictable outcome for many people.

“I have written to all the housing bodies that operate in my constituency to ask them what action they can take to identify people who have lost money because of Farepak and whether they can provide any form of support that will help to ensure their tenants do not get into even worse financial difficulties than they are in at present.”

Ms Cunningham fears dire consequences if early aid is not offered.

“Early intervention can help to prevent financial problems from spiralling out of control,” she insisted.

“I very much hope that organisations will adopt a proactive stance to help their tenants avoid such problems.”

North Tayside MSP John Swinney — also the SNP’s finance spokesman — is similarly concerned by Farepak’s collapse and called on everybody to pull together in a bid to reduce the resultant financial woes.

“The regulatory framework has simply not protected the investment that was made by low-income families in Scotland and the rest of the UK,” he told the Evening Telegraph.

“Indeed their money has, in effect, been used as a cash cow for a series of failing businesses within the European Home Retail group.

“I hope the UK Government’s investigation will carefully consider that matter,” Mr Swinney continued.

“After all, if people are to have confidence in such savings schemes, such a loophole must be closed.”

Although action is already being taken, Mr Swinney called for more to be done.

“This issue will affect a large number of low-income families and it is incumbent on everyone to do what they can to help out,” he said.

“Individuals have contributed to the fund, some corporate entities have made substantial contributions and various private sector operators have contributed to the debate and proposed solutions.

“However, I feel that everyone could do a little bit more,” he continued.

“If people are willing to ensure that this fund is of a reasonable size, we might be able to find a way not only of giving people some money to fund their Christmas activities and support their families but of helping a lot more people to avoid getting into financial peril in the months and years to come.”