MSE News: MPs call for cheque guarantee card return

ic

All points in support of the cheque - which is here to stay and nobody is arguing that point. The discussion at hand is about whether the cheque guarantee card should be reinstated.

brewerdave

In the last 12 months I have written ~ 30 cheques - for car servicing, small building repairs, window cleaners, deposit on a holiday villa & various cheques to relatives. NOT ONCE, have I used or been asked for, my cheque guarantee card!!!

tagq2

ic wrote: »

All points in support of the cheque - which is here to stay and nobody is arguing that point. The discussion at hand is about whether the cheque guarantee card should be reinstated.

The Payments Council and some posters above seemed convinced that cheques in general should be on the way out. Removal of guarantees to the payee are one step of reducing confidence in cheques and pushing people to move when they would otherwise not do so, although that's over-simplifying things: over the past decade cheque acceptance for retail outlets has become increasingly expensive compared to other methods so they stopped accepting cheques; a reduction by 1/3 in guarantee card usage in 2008 was the excuse needed to announce a closure of the scheme while 95 million cheques per annum were still being guaranteed; elimination of the guarantee scheme pushes off remaining retailers. Business interest declines - the typically arrogant modern decision-maker thinks this is a necessary and sufficient condition for elimination of any service.

To put it bluntly, plastic fraud against total turnover runs at about 0.1%. Meanwhile a couple of years ago cheque fraud produced losses of only £30-40 million. But hardly anyone uses cheques any more, right? No. 1.3 billion cheques were written in 2009, almost a third of the 1990 value when far fewer people had plastic or used DD. 683 million were personal transactions. Cheques turned over £1,255 billion in that year. Cheques with the guarantee scheme worked for immediate transactions. The 2-4-6 and 2-6-6 clearing standards continue working otherwise.

JuicyJesus

Good luck getting all of the banks to reintroduce the scheme they were gagging to get rid of and none of them wish to reintroduce for the very sound reason that guaranteed cheques cost them lots of money in operating costs, bad debts and fraud for very little benefit to anyone at all (even the people who use them, who benefit from more protection - indeed, any protection at all - with a Visa debit card).

tagq2

They won't reintroduce it for the foreseeable future - that sort of scheme has been phased out across the world, Ireland excepted.

As to straight fraud, there is little cheque fraud - see above. But what really sucks for the bank is that it guaranteed to pick up the slack, where many fraudulent credit card transactions simply result in the merchant's being out of pocket. Consumer-friendly and business-friendly but not bank-friendly? An outdated approach.

2sides2everystory

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!

Have you had a meaningful discussion with the elders in your family circle about this?

Older people especially are discriminated against because many are unable to grasp the debit card system and no bank thought about them when they unilaterally introduced it as the primary means of ID in their branches. My elderly parents recently forgot their PIN and if it wasn't for a lucky break through a discretionary decision made at their local bank they would have been short of cash this week while they wait for a new PIN or PIN reminder. Evenso, no-one told them that when they get it, they can change it to something memorable.

I was in a large post office today with the usual major queues. Whilst queuing I noticed a photocopied notice about the abolition of the cheque guarantee system. There was a long list of transactions no longer permitted by cheque because of it from renewal of Fishing Licenses to UK and Irish Passport Applications.

The running down of the cheque system and the abolition of the guarantee system are all part of the same poorly implemented (and now to be reversed) initiative which was ntended to make it impossible for people to use cheques by hook or by crook.

The "why" you talk about, has never been, and will never be addressed in full with regard to the current batch of senior citizens.

michaelvintner

2sides2everystory wrote: »

Have you had a meaningful discussion with the elders in your family circle about this?

Older people especially are discriminated against because many are unable to grasp the debit card system and no bank thought about them when they unilaterally introduced it as the primary means of ID in their branches. My elderly parents recently forgot their PIN and if it wasn't for a lucky break through a discretionary decision made at their local bank they would have been short of cash this week while they wait for a new PIN or PIN reminder. Evenso, no-one told them that when they get it, they can change it to something memorable.

I was in a large post office today with the usual major queues. Whilst queuing I noticed a photocopied notice about the abolition of the cheque guarantee system. There was a long list of transactions no longer permitted by cheque because of it from renewal of Fishing Licenses to UK and Irish Passport Applications.

The running down of the cheque system and the abolition of the guarantee system are all part of the same poorly implemented (and now to be reversed) initiative which was ntended to make it impossible for people to use cheques by hook or by crook.

The "why" you talk about, has never been, and will never be addressed in full with regard to the current batch of senior citizens.

My Nan, Lovely lady 85 this year figured out her debit card and chip and pin ages ago. She still has a cheque book but it is used to pay bills by post.

While I agree that cheques should be kept for paying bills by post or at a bank as a payment form in shops with a cheque guarantee card they are as out dated as Betamax video recorders.

JuicyJesus

2sides2everystory wrote: »

Older people especially are discriminated against because many are unable to grasp the debit card system

It's a really simple system to use. It's quite insulting to most older people to suggest that they are incapable of doing something as simple as inserting a card, entering a number and pressing a button. Some may not want to try it, or worry that they'll mess something up, but the solution there is help and reassurance.

Even if they have a disability that prevents them from using a PIN, they can still use chip and signature, which is functionally the same as a cheque with none of the drawbacks.

MoneySaverLog

Hardly ever use cheques, but they are needed. I've used cheques to open online bank accounts. Often I've been asked to send them a cheque from my linked account as the first deposit.

If I buy something through the post, I'll often send a cheque. Also it's a easy way to gift money to someone without having to ask for their account details.

If cheques were withdrawn I would not be able to do any of that. As for the guarantee scheme, in 27 years of having a cheque book, I only ever remember guaranteeing a cheque a couple of times.

EarthBoy

2sides2everystory wrote: »

Au contraire. It is insulting for you to be suggesting that anyone that prefers not to have to try it is somehow deficient in marbles.

Preferring not to try something, is quite different from being unable to do it. I might prefer people who owe me money to turn up on the doorstep and hand over the cash, rather than send me a cheque or pay the money directly into my account, but I have no right to expect them to accede to such an unreasonable request.

Cheques were new fangled innovations once; now they are simply old-fashioned and well past their sell-by date.