Simon Read: Leave our cheques alone, even if we don't use them
Banks are determined to ditch this expensive method of payment despite its popularity, but doing so could put older customers at risk
Sunday 12 September 2010
Almost 300,000 fewer cheques are written a day than a year ago, according to figures published this week by the Payments Council. That's a 10 per cent decline in a year, suggesting that plans by the banking industry to scrap cheques by 2018 are prescient. The council is certainly keen to trumpet the decline, using emotive words like "plummets" in its announcement.
Further, a straw poll among colleagues revealed that none of us has written a cheque for years. I rely on online banking and plastic for all payments, and am happy to do so. Yet cheques still have fierce support from many. Age charities, for instance, warn that doing away with cheques would penalise older people who struggle with the plastic cards which are the current alternatives pushed out by the banks. The problem for some older folk is partly the need to remember a four-digit PIN, but also that they've used cheques all their lives and don't see a need to change. In fact it's suggested that instead of turning to plastic cards they will revert to using cash, which could mean keeping more money at home, or with them. The net result of that, of course, would be that they would be come a more attractive target for sneak thieves and muggers.
For that reason it's essential that the banking industry doesn't rush to scrap the cheque system. It wants to do so because the administration involved with cheques is costly, as the pieces of paper need to be taken from shops to a bank branch, and on to the issuing bank and so on. Electronic payments can all be done at the touch of a button, saving millions of pounds in costs.
But the banks shouldn't be solely driven by cost savings. Giving customers what they want is important, and while there's still a sizable demand for cheques, the banks should meet it.
Trapped in the red
A shocking report from the Consumer Credit Counselling Service suggests a third of people struggling with debt can do nothing about their situation. The debt charity said that 30,446 of the 96,334 clients it helped in the first half of the year had no "appropriate" solution to their debts. The only course of action that could help was for them to earn more, which the charity acknowledged would be impossible for many.
The charity said problems were not because people have borrowed too much or have the lowest incomes, but simply because household expenditure exceeded their income by an average of £449 a month. In many cases that's because they have lost their job, had wages frozen or cut, or had an added expense, such as having a baby.
For whatever reason, it means there are tens of thousands more people living on a financial edge, with the danger of their debts getting out of control. It's time lenders helped out by freezing interest charges or offering payment holidays to struggling families. Helping people get through the tough times will help us all.
Let them cut costs
The hard times are also hitting those with savings. Almost a third of us have drawn on our savings or investments in the past year to supplement our income, says Schroders. The news prompted George Ladds, head of investment and pension research at Fair Investment Company to say: "When a financial situation has hit the point where savings are becoming part of everyday spending, something has to change." He advises struggling families "to tighten their belts and find ways to cut expenditure rather than continue to put such massive strains on their finances." That's good advice but, in case Ladds hasn't noticed, that's exactly what people have been doing these past two years or so.
Expose rogue landlords
Shelter has launched a campaign to crack down on rogue landlords. It says a million people have been hit by private tenancy scams in the past three years, such as "let and run", when a con artist breaks into an empty home and takes a deposit and rent from unsuspecting prospective tenants, who end up out of pocket and without a home.
Campbell Robb, Shelter's chief, says "We want to expose as many rogue operators and con artists as possible and would urge anyone who has fallen victim to this kind of scam to get in touch with us immediately." If you've been a victim, or know of anyone who has, go to shelter.org.uk/evictroguelandlords.
Betting on Barclays
The last word on Barclays' new boss Bob Diamond has to go to Viz comic. It advises: "Barclays: make more of your casino banking ethos by combining cash machines with fruit machines."
Julian Knight is away
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
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