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Final day dawns for cheque guarantee cards

Cheque Guarantee Card Scheme withdrawn on 30 June

Guaranteed cheque being written

Today is the final operational day for the Cheque Guarantee Card Scheme

Today is the final day on which cheque guarantee cards will operate, meaning that as of tomorrow it will no longer be possible to guarantee a cheque using the Scheme – membership of which has historically been denoted by the presence of a Shakespeare symbol on plastic cards.

The Shakespeare hologram served to assure the recipients of cheques that, even if the writer’s bank account contained insufficient funds, the money they were owed would still be advanced. Usually, cheques were guaranteed in this way up to a maximum of £50, £100 or £250.

However, the UK Payments Council took the decision to close the Cheque Guarantee Card Scheme earlier this month, citing a ‘terminal decline’ in the use of cheques as the main reason.

The first guaranteed cheque was written in 1965, and the industry-wide Scheme was established in 1969 – before most people had plastic cards, and at a time when cheques were the main method of non-cash payment for consumers.

Have your say on the scrapping of the Cheque Guarantee Card Scheme over on the Which? Conversation.

Goodbye to cheque guarantee cards

According to the UK Payments Council, of the 1.4 bn cheques written last year only 95 million (7%) were guaranteed. This represents a decline of one third on the previous year, and a fall of 70% in the number of guaranteed cheques over the past five years.

The decline, the Council says, has been driven by the decision of many retailers to stop accepting cheques. For example, no major UK-wide supermarket chain now allows customers to pay by cheque.

In scrapping the Cheque Guarantee Scheme, the Payments Council claims it is acting in ‘all parties’ interests’.

‘This does not mean the end of cheques, as businesses will continue to be able to accept them and customers will still be able to write them,’ it says in a statement on its website.

Jacqui Tribe, manager of the UK Domestic Cheque Guarantee Card Scheme, commented: ‘Now an industry-wide date has been set [for the withdrawal of cheque guarantee cards] we can look to support customers through the change by providing information on what this will mean. The alternative was to let the Scheme wither on the vine – which was more likely to have led to confusion, mixed messages and potentially exposing more customers to the risk of fraud.’

Criticism of cheque guarantee withdrawal

However, the decision to scrap the Cheque Guarantee Card Scheme has met with disapproval from some charities and consumer groups – particularly those concerned with helping older people.

Many of the same groups have been critical of the UK Payments Council’s intention to abolish cheques altogether in 2018 – a plan which is now under review for a second time by the Treasury Select Committee due to the furore surrounding the proposals. (You can have your say on the future of cheques by commenting on this Which? Conversation blog post.)

Michelle Mitchell, charity director at Age UK, said: ‘The demise of the cheque guarantee card means that there will be fewer places accepting cheques and older people are more likely to revert to cash, which brings its own problems.’

Which? Money researcher Melanie Green says: ‘The possibility that more retailers will stop accepting cheques is certainly a risk we face now the decision has been made to scrap the Cheque Guarantee Card Scheme. It could be another nail in the coffin for cheques, when we know people are already concerned about the prospect of losing them before a viable alternative is in place.’

pound coins

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