Cheque guarantee scheme to close in 2011

The cheque guarantee scheme is to fold on 30 June 2011, bringing an end to the current assurances provided by banks.

The Payments Council and the 24 banks and building societies that operate the UK guarantee card system, have confirmed that it will no longer be possible to guarantee a cheque after this date.

However, individuals will still be able to write cheques and businesses will continue to accept them.

The scheme’s demise follows the rapid decline in cheque use throughout the UK, with no major UK-wide supermarket chain now accepting cheques as a method of payment.

Just 7% of the 1.4 billion cheques written last year were guaranteed under the system.

The scheme’s initial guarantee limit 40 years ago was £30. However, today there are three limits of £50, £100 and £250. Since 1 October 1990, the William Shakespeare hologram or logo has been displayed on all cards that possess the guarantee function.

Commenting on the announcement, Jacqui Tribe, manager of the guarantee scheme, said: ‘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 and mixed messages.’