MSE News: MPs call for cheque guarantee card return
Former_MSE_Guy
Posts: 1,650
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This is the discussion thread for the following MSE News Story:
"An organisation which sets payment methods should consider reintroducing the cheque guarantee card, MPs said ..."
"An organisation which sets payment methods should consider reintroducing the cheque guarantee card, MPs said ..."
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Comments
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Tesco should start accepting cheques again!The Daleks Reign Supreme, All Hail The Daleks!0
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Actually is there a list of shops that do and don't accept cheques now?The Daleks Reign Supreme, All Hail The Daleks!0
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Cheques with guarantee (not!) card are are very risky for traders. I've had a stolen cheque given to me for goods, with a card and the bank has wriggled out of paying by saying the signature on the card does not match the guarantee card. Then get charged by my bank for returned cheque. Would never take them again. Chip/PIN with instant authorisation is the only method of payment (plus cash) i would accept.0
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experience08 wrote: »Cheques with guarantee (not!) card are are very risky for traders. I've had a stolen cheque given to me for goods, with a card and the bank has wriggled out of paying by saying the signature on the card does not match the guarantee card. Then get charged by my bank for returned cheque. Would never take them again. Chip/PIN with instant authorisation is the only method of payment (plus cash) i would accept.
Now, there may be some people who don't want to switch to a new system, but the question there is "why"? If that "why" is addressed in full, there's no real reason to retain a payment system that pre-dates banknotes!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
MSE News: MPs call for cheque guarantee card return
Does this make it easier for them to claim expenses or something?
Idiotic and backwards.0 -
Consider this. You go abroad with your debit card and 2 credit cards, and 2 days later they all stop working. Some fraudster has managed to get into all those accounts, push one up to the limit and the other 2 have been frozen because of the unusual transactions made. Where do you now stand?
Now consider if you had used travellers cheques instead of plastic? The frausdater wouldn't have been able to pull the rug from under you because he does not have physical posession of the checkes. The difference is that with a virtual payment system, you have less control, and you can end up helpless.0 -
Consider this. You go abroad with your debit card and 2 credit cards, and 2 days later they all stop working. Some fraudster has managed to get into all those accounts, push one up to the limit and the other 2 have been frozen because of the unusual transactions made. Where do you now stand?
Now consider if you had used travellers cheques instead of plastic? The frausdater wouldn't have been able to pull the rug from under you because he does not have physical posession of the checkes. The difference is that with a virtual payment system, you have less control, and you can end up helpless.
Extremely unlikely and therefore not helpful as an illustration! Its unlikely anyone will have a debit card and 2 credit cards all on the same supplier so they won't all get blocked because of one hacker on one account. That's before you get to the point that UK sterling cheque books (which is what this relates to) are as useful as a chocolate fireguard abroad! Its far easier to carry some emergency cash on you, than to carry an emergency cheque book the size of around £200 in £10 notes!
Cheque books are fine for low level transactions between relations, or with small suppliers who are prepared to take the risk rather than pay for a terminal, but they are long outdated. I think I've written one cheque in the last year and that was to my son's scout group for subs - they don't need a guarantee card as they know where I live and can kick my son out if the cheque bounces.Adventure before Dementia!0 -
"there may be some people who don't want to switch to a new system". It's maybe not a case of not wanting to switch, more using them in parallel as an alternative means of payment.
I have recently been dealing with a deceased's estate (telephone numbers financially!) and if it weren't for cheques then I would have had great difficulty in managing things. How do you get a receipt or similar with an electronic bank transfer for monies paid or received? I am not willing to print out bank statements to show all and sundry transactions relevant to that estate.
I hardly use cheques myself but they can be very useful on occasion.0 -
oldagetraveller wrote: »"there may be some people who don't want to switch to a new system". It's maybe not a case of not wanting to switch, more using them in parallel as an alternative means of payment.
I have recently been dealing with a deceased's estate (telephone numbers financially!) and if it weren't for cheques then I would have had great difficulty in managing things. How do you get a receipt or similar with an electronic bank transfer for monies paid or received? I am not willing to print out bank statements to show all and sundry transactions relevant to that estate.
I hardly use cheques myself but they can be very useful on occasion.
But this discussion is not about the abolition of cheques, that has been abolished(!) and cheques are here to stay.
This discussion is about bringing back the cheque guarantee scheme, which meant retailers were certain about a cheque clearing assuming they have written the correct card details on the reverse of the cheque.
Who, honestly, would want to stand and and write a cheque out (or have it printed) in a supermarket queue, when you can enter a 4 digit number and be done in 10 seconds? I cannot understand why cheques are needed as a form of payment in shops.0 -
(1) Cheques are a one-time authorisation unless someone is prepared to engage in paper-based fraud - once someone has your card details, there is the potential for electronic abuse. With your account information as given on your cheque, the most interesting thing someone might try to do is set up a fraudulent direct debit, but being the beneficiary of such a set-up is difficult vs benefitting from a debit card;
(2) And don't expect the bank not to hit you with charges when someone using your debit card details makes you go overdrawn. They may pay you back but the fight will waste time and you will have to prove that you took appropriate care of your card/PIN - while with a cheque there is no care to have to take aside from filling it in correctly;
(3) Cheques are free for individuals to write and deposit;
(4) Direct bank transfers require you to know, and not enter incorrectly, a sort code and account number. Some don't seem to make any effort checking the name on the account, so good luck getting your money back after a single digit typo/misreading;
(5) At least one sort code + account number must for direct transfers be very public, giving a large pool for at least one idiot to set up a fraudulent direct debit (see the Jeremy Clarkson challenge). This counters (1) but the number of potential abusers is much smaller for cheques as no account details need to be broadcast. Yes, a deposit account shouldn't have direct debit facility - but /no/ account should have any sort of automated debit facility unless explicitly requested (principle of least privilege) but that doesn't stop banks providing it by default;
(6) The paper trail for cheques is substantial: payer/payee have the cheque itself, the stub, the stamped paying-in book. When the bank makes an error and asks you to prove your case, you have something;
(7) Cheques take effort to write, discouraging spending. Visa and Mastercard are experts at making spending money easy.
For acquaintances, clubs, etc. cheques are still an excellent way to pay.
(8) ETA And when I was receiving regular payments from the US for work done, the cheapest method was to deposit a USD cheque in my UK account. Commercial exchange rates plus small fixed fee, and after the first couple they took not more than a week to clear. Maybe cheaper electronic methods have appeared over the last 4-5 years for transferring money from the US? Although I doubt the people paying me would have been happy to pay charges their end to use them when they could just stick a stamp on an envelope. (FWIW the exchange rates + fees on Paypal payments would have made them much less attractive.)0
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