The Cheque Guarantee Card Scheme announces closure date of 30th June 2011

Today the 24 bank and building society members of the UK Domestic Cheque Guarantee Card Scheme have announced that the Scheme will close on 30th June 2011, meaning that it will no longer be possible to guarantee a cheque under the Scheme after this date. The decision to close the Scheme was taken by the Payments Council in June this year as guaranteed cheque use is in terminal decline. The Payments Council concluded that it was in all parties’ interests to manage the Scheme’s demise in a coordinated fashion following extensive consultation with guaranteed cheque users and acceptors. This announcement 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.  

During the next two years, those banks and building societies who provide cheque guarantee services will ensure businesses who still accept guaranteed cheques, and personal customers who still write them, are made aware of the closure date, and that they are given information about the alternatives.

To help answer likely questions that businesses or consumers may have on this issue the Scheme has today published two fact sheets available below:

Guaranteed Cheques - Acceptors Fact Sheet (PDF)

Guaranteed Cheques - Consumers Fact Sheet (PDF)

The first guaranteed cheque was written in 1965, and the industry-wide Scheme was established in 1969, before many of us had a plastic card, and at a time when cheques were our main non-cash method of payment. The Scheme’s initial guarantee limit 40 years ago was £30; today there are three limits of £50, £100 and £250. Since 1 October 1990, the common identifier on all cards with cheque guarantee functionality has been William Shakespeare, and his image is used within the cheque guarantee hologram or logo on all cheque guarantee cards.

Of the 1.4 billion 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. This decline has been driven by many retailers, petrol stations and similar outlets taking a decision to no longer accept cheques. No major UK-wide supermarket chain now accepts cheques. As some major retailers stopped accepting cheques part way through 2008, a further 25% fall is forecast for 2009, and it is expected that the rapid decline will continue: by 2011 guaranteed cheque volumes are forecast to be only half 2008 levels.

Jacqui Tribe, Manager of the UK Domestic Cheque Guarantee Card Scheme says: “Now an industry-wide date has been set 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.”

ENDS

For further information contact the UK payments industry press office on 020 7711 6316 or press@ukpayments.org.uk

Notes to editors:

From 6th July 2009, we have stopped using the name APACS in favour of names that better describe the different parts of the industry. The UK payments industry has a number of different schemes and separate industry groups including:

• Bacs (which manages the Direct Debits and Direct Credits schemes)
• CHAPS Co (which manages CHAPS Sterling and Faster Payments Scheme)
• The Cheque & Credit Clearing Company (which manages the cheque clearing system in Great Britain and the systems for clearing paper bank giro credits and euro-denominated cheques)
• DCPCU (the specialist, banking industry funded, police unit that is responsible for investigating serious and organised card and cheque fraud)
• Financial Fraud Action UK (the name under which the financial services industry co-ordinates its activity on fraud)
• Payments Council (the organisation responsible for ensuring that payment systems and services work)
• The UK Cards Association (the leading trade body for the cards industry in the UK)
• SWIFT UK (a membership organisation representing the UK community of SWIFT users by co-ordinating views, forming a common UK policy and lobbying and influencing key stakeholders)
• The UK Domestic Cheque Guarantee Card Scheme (providing a guarantee for personal cheques up to a certain limit; closing on 30th June 2011)

There are 24 banks and building society members of the UK Domestic Cheque Guarantee Card Scheme:

• Airdrie Savings Bank
• AIB Group (UK) p.l.c.
• Allied Irish Bank (GB) Private Banking
• First Trust Bank
• Bank of England
• Bank of Ireland
• Barclays Bank plc
• C Hoare & Co
• Chelsea Building Society
• Citibank International Plc
• Co-operative Bank plc
• Cumberland Building Society
• Europe Arab Bank plc
• Harrods Bank Ltd
• HSBC Group
• First Direct
• HSBC Bank plc
• HSBC Private Bank (UK) Limited
• Lloyds Banking Group
• Bank of Scotland
• Bank of Scotland Banking Direct
• Capital Bank plc
• Halifax plc
• Hill Samuel Bank Ltd
• Lloyds TSB Bank plc
• Lloyds TSB Private Banking Ltd
• National Australia Group
• Clydesdale Bank plc
• Yorkshire Bank
• National Bank of Egypt International Ltd
• Nationwide Building Society
• Northern Bank Ltd
• Northern Rock plc
• Reliance Bank Ltd
• Royal Bank of Scotland Group
• Adam & Co Plc
• Child & Co.
• Coutts & Co
• National Westminster Bank plc
• NatWest Offshore Limited
• Royal Bank of Scotland (Gibraltar) Ltd
• Royal Bank of Scotland (Guernsey) Ltd
• Royal Bank of Scotland (IOM) Ltd
• Royal Bank of Scotland (Jersey) Ltd
• Royal Bank of Scotland Plc
• Royscot Trust plc
• Ulster Bank Ltd
• Santander
• Abbey (inc. Cater Allen)
• Alliance & Leicester plc
• Standard Chartered Grindlays (Offshore) Ltd
• UBS AG

The UK Domestic Cheque Guarantee Card Scheme is one of seven UK payment schemes that has a contract with the Payments Council.  This means that the Payments Council can make a decision which is binding on Scheme members. The Payments Council issued a press release on 25th June 2009 giving details of their decision with an accompanying report. See www.paymentscouncil.org.uk

This is the logo that appears on cards that are part of the UK Domestic Cheque Guarantee Scheme.      

Copies of the logo are available from press@ukpayments.org.uk

Guaranteed cheque facts:

• The use of guaranteed cheques is in rapid decline with volumes down a third in the last year and by 70% in the past five years.
• Last year, of the 1,400 million cheque transactions, just under 7%, or 95 million were supported by a cheque guarantee card; the number is falling rapidly. Four million consumers say they still use guaranteed cheques regularly but in many cases the guarantee function is not an essential part of the transaction.
• Over a quarter of all debit cards do not have cheque guarantee functionality. Over 99% of the 59.9 million cheque guarantee cards still in issue are also either debit or credit cards; the vast majority being debit cards which, of course, provide an alternative and widely-accepted means of payment.
• In 2008, losses totalling £43 million were reported as a result of cheque guarantee card misuse.
• Most major high street retailers no longer accept cheques as a form of payment.
• The average transaction value of a personal cheque is £267. The maximum guarantee limit is £250, with 88% of all cards having a limit of £100 or under.
• In the research conducted as part of the Payments Council review of the Scheme, only a quarter of all businesses said that they had received a guaranteed cheque in the previous six months.