MPs call for banks to restore cheque guarantee cards
Wednesday, 16 November 2011 09:55
A group of MPs has called on the banks to bring back the cheque guarantee scheme or something similar in order to prevent cheques from disappearing completely.
Cheque guarantee cards, which previously ensured that cheques up to £50 or £100 were honoured, were abolished by the Payments Council in June.
The organisation also wanted to phase out cheques completely by the end of 2018, but a public backlash meant it withdrew these plans and agreed that they would be maintained indefinitely.
However, a Commons Treasury Committee said the lack of guarantee cards is causing fewer people to make use of cheques, since small businesses and many shops are now uncertain about accepting them.
"Without such a scheme there is a risk that more and more shops and other bodies will refuse to accept cheques; the cheque would wither on the vine," its report commented.
Now, the Select Committee has called upon the Payments Council to produce more details about the effects of the abolition of the guarantee scheme and said it would like the see it or a suitable alternative brought back to increase confidence among small companies.
Its report also suggested financial regulation for the Payments Council "to ensure there is never again a repetition of the cheques debacle".
In response, the Payments Council said it will begin conducting a review and have the results ready to publish by the end of the year before setting out its next steps.
Many campaigners want to see cheques continue and guarantee cards brought back for businesses that do not have facilities for Chip and Pin, as well as for many pensioners who rely on them.
Charity director of Age UK Michelle Mitchell said: "This report is a strong signal to the government to ensure that banks listen and protect what is an essential method of payment for many older people."
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