Written evidence submitted by A Albert
The press reports that your Committee is launching
an inquiry into the UK Payment Council Announcement that cheques
would be phased out by October 2018. According to the council
cheques are a means of payment in a "long term terminal decline".
We are told that the use of cheques has declined by 40% in the
last five years.
The objectivity of these statements should be
viewed in the context of their source. The Board of the UK Payment
Council is composed of 15 members, 11 of which handle
the bulk of cheque transactions. To be specific these are members
of the banking industry. The remaining four are purportedly, independent.
Collectively they could veto Board decisions.
Associate Members (11) include firms involved
in IT services, IT consultancy, Information Security, etc. Despite
the presence of a Consumer User Forum, one of three, the membership
appears to beto a naive observersomewhat incestuous.
The terminal decline could be better described
as assisted death, since the move away from cheques is due to
a massive barrage of measures taken by major industries, in addition
to Banking, to discourage individuals from using this system of
As a former banker, I would surmise that the
introduction of same day value, and the consequent disappearance
of free float has stifled the appetite for cheque processing,
once a most sought after Correspondent Banking business.
Some of the measures adopted are in the category
of negative incentives, if not outright illegal.
BT charge a £4.50 "Payment Processing
Fee" per cheque in settlement of their bills. The fee in
question is levied by BT Payment Services Ltd. It is, of course,
the prerogative of BT, or any other company, to handle their administrative
and operational matters as they deem fit. However the consumer
should not foot the bill for their proclivities, particularly
since cheques areto the best of my knowledgea legal
means of payment. This is part of a general trend to burden consumers
with more and more charges, once clearly part of product/service
delivery (eg. Orange: £1.28 to produce an itemised bill).
The farcical aspect of this is Ryanair's proposed £1 charge
for the use of WCs in flight. In terms of macroeconomics, these
charges must impact on the cost of living, though I doubt they
are reflected in the CPI.
What is disturbing is the apparent indifference
of Governments in this and other countries towards the present,
consumer unfriendly trend.
The financial crisis visited upon the world
at large is part and parcel of this benign neglect. Given the
amount of reporting that banks have to submit to regulatory authorities
it is difficult to understand how the risk of derivative products,
packages bonds insured against default because of their questionable
nature and the proliferation of ad hoc offshore vehicles could
have aroused the interest of inquiring minds.
The increasing encroachment of computers in
our daily life would require a separate, in depth analysis. The
loss of freedom that the introduction of ID may bring about, so
bemoaned by the various liberty advocates, would pale in contrast
to the slavery the computer will impose on our society in the
very near future.
For one, no government can protect the consumer
from online financial scams, that cost all of us, at present,
£3 billion per year.
The abolition of a means of payment that has
been in existence for some 350 years should not be left to
experts, who are notoriously unable to see beyond their expertise,
but should be a matter for a referendum. This would allow those
who actually use chequessmaller businesses, the elderly
(of which there are 11.58 million)to express their
wishes directly and not by proxy.