Cheque Guarantee Cards To Be Scrapped By Banks

(Daily Mail) – ONE OF THE BIGGEST BANKS has sounded the death knell for the cheque guarantee card, with rivals set to follow its lead.

Santander, owner of Abbey and Alliance & Leicester, said yesterday that all of its new debit cards will not carry the popular ‘guarantee’.

Rival banks will do the same in the coming months, leaving small businesses which rely on cheques exposed to fraud and financial loss.

At present, most debit cards include a ‘cheque guarantee’ logo on the back.

It features an image of William Shakespeare’s head and usually states it is guaranteed for about £100 or sometimes for up to £250.

This means that anybody from a milkman to a small hotel knows that the cheque is approved by the bank for this amount.

Latest figures from the Payments Council, an umbrella group for British banks and building societies, said four million people regularly use cards to guarantee their cheques.

But in a further sign of the decline of the payment method, months ago the council said that it is going to axe the cheque guarantee service from the end of June next year.

Yesterday Santander, which has around eight million current account customers, announced new debit cards will not include the cheque guarantee logo.

A spokesman for the Spanish firm said it has decided to start replacing all cards when they come up for renewal.

A card typically lasts for up to three years.

‘In light of the need to replace around five million debit cards which have a cheque guarantee logo, Santander is taking a phased approach to make this task more manageable,’ the spokesman added.

‘This approach should ensure that these debit cards are replaced in a measured and efficient way, so customers are not faced with a delay in replacing their card, which would be likely if this phasing didn’t take place.’

Santander said customers can still use cheques despite the scrapping of the guarantee.

When cards come up for renewal, customers will be sent a new one – without the familiar logo on the back.

A Payments Council spokesman said banks are doing what they can to make payment methods safer. The cheque guarantee is being increasingly ignored by people who prefer using a debit card, a credit card or cash, the group’s research suggested.

When people do write a cheque, the typical amount is £268 – above the standard cheque guarantee limit.

The council has said it wants to write off the cheque by October 2018.

The measure has dismayed the elderly, who have used cheques all their lives and are reluctant to switch.

Many are wary of using cash machines, and prefer to withdraw cash by writing themselves a cheque.

At the same time, tradesmen, small shops and builders rely on the cheque as a daily part of their operations.