Written evidence submitted by the Consumer
Council for Northern Ireland
EXECUTIVE SUMMARY
1. The Consumer Council has received assurances
from the Payments Council that the cheque clearing system will
only be closed down if there is evidence that consumers in Northern
Ireland are able and willing to use alternatives to cheques.
2. Consumer Council research shows that
8% of consumers here prefer to pay their household bills by cheque
and that those aged over 65 are more likely to prefer cheques.
Consumers use cheques because they provide a paper trail, they
help consumers control their budget and bill payments, and they
are the convenient and safer option in many instances, including
sending money in the post, into school with children and to charities.
However, we recognise many retailers now refuse to accept cheques
and our research also shows that 59% of 16-24 year old consumers
don't have a cheque book.
3. The Payments Council is setting a significant
challenge for banks and other providers to find suitable and appropriate
alternatives to cheques soon that are acceptable to all consumers,
well before 2018. We trust that if appropriate alternatives are
not available or if they do not win the confidence of all consumers
then cheques will not be phased out.
ABOUT THE
CONSUMER COUNCIL
4. The Consumer Council was set up by Government
in 1985 and is funded by the Department of Enterprise, Trade
and Investment (DETI) in Northern Ireland. Our job is to speak
up for consumers in Northern Ireland and give them a voice that
is taken into account by policymakers. The Consumer Council welcomes
this opportunity to provide our comments.
FINANCIAL CAPABILITY
IN NORTHERN
IRELAND
5. Consumers in Northern Ireland have lower
levels of financial capability than consumers in the rest of the
UK. Our analysis of the Financial Service Authority's Baseline
Survey, published in March 2006, found that in Northern Ireland:
— Almost a third of people here believe
they are only one month away from hardship if anything unexpected
should happen;
— Half have no insurance for loss of income
or property; and
— More than a quarter don't get any independent
information or help before choosing a financial service, like
a mortgage.[2]
CHEQUES
6. The Consumer Council does not take a
view on whether or not a date should be set by which cheques should
be phased out but we strongly urge that a plan for cheques be
developed.
7. Cheques are important to consumers because
cheques:
(a) Provide a "paper trail" which helps
them keep track of their money;
(b) Help consumers feel they have more control
of their budget, in contrast to direct debits; and
(c) Are a convenient way to send money, for instance,
as a present in the post or with their child into school for a
school trip.
8. It is important that suitable alternatives
are found for cheques and that consumers are educated about all
the payment options available to them. Payment options should
be straightforward to use and meet the needs of consumers.
9. We are aware that statistics on cheque
usage in Northern Ireland is not available. In light of this we
would urge that research be commissioned to take into account
the particular circumstances of Northern Ireland.
10. Our own research shows that eight% of
consumers here prefer to pay their household bills by cheque and
that those aged over 65 are more likely to prefer cheques.[3]
59% of 16-24 year old consumers don't have a cheque book.[4]
11. The Consumer Council has received assurances
from the Payments Council that the cheque clearing system will
only be closed down if there is evidence that consumers in Northern
Ireland are able and willing to use alternatives to cheques.
12. The Payments Council is setting a significant
challenge for banks and other providers to find suitable and appropriate
alternatives to cheques soon that are acceptable to all consumers,
well before 2018.
February 2010
2 Managing Money: How does Northern Ireland add
up? 2007, The Consumer Council, (A research report based on
the Financial Services Authority (FSA) UK Baseline Survey). Back
3
17% of respondents aged over 65 said they preferred to pay
household bills by cheque. Back
4
Consumer Council research October 2009, Millward Brown Ulster
Omnibus Survey, 1,016 adults aged 16 or older. Back
| 
