MPs support cheque guarantee cards

| November 16, 2011
MPs support cheque guarantee cards

The Treasury Committee, which includes MPs from all political parties, has called for the cheque guarantee scheme to be re-instated and government departments have been ordered to accept cheque payments from customers.

The Payments Council, the body which sets the strategy for payments in the UK, ended the cheque guarantee card in June.

However it was forced to scrap its plan to end the use of cheques completely following complaints that they were an essential payment method for the elderly and small businesses.

The Treasury Committee wants the cheque guarantee card, which ensures that cheques up to £100 are honoured, to be re-opened to ensure that this method of payment does not ‘wither on the vine’.

It is concerned that retailers could refuse to accept cheques without a cheque guarantee card, which ensured that a bank would honour the cheque even if the account did not contain sufficient funds.

The card was also widely used tradesmen such as plumbers and other small businesses.

Commenting on the remarks by the Treasury Committee, Michelle Mitchell of Age UK said: ‘This is a strong signal to the Government to ensure that banks listen to their customers and protect what is an essential payment method for many older people.’

Age UK was one of the organisations which campaigned vigorously to stop cheques being withdrawn amid concern that this could force elderly people to hand over their card pin numbers to friends and relative, potentially putting them at risk of financial abuse.

The Payments Council will publish its research into the potential effect of closing the cheque card guarantee scheme by the end of the year, but the Treasury Committee wants its decisions to be scrutinised more closely by an independent watchdog.

The government plans to launch a consultation into bringing the Payments Council under the umbrella of financial regulation early next year.

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