Written evidence submitted by Melvin Anderson
1. Cheques should either be retained, or
an alternative should be introduced which is accessible to housebound
elderly and handicapped,
2. any replacement for cheques should generate
a trustworthy evidence trail that is available for dispute resolution,
3. any replacement for cheques should receive
the same support in law as the current cheque system.
My qualifications include a Ph.D. in Computer
Science from Cambridge University and an M.Sc. in Information
Security from Royal Holloway College, London. I have worked professionally
in computing, information security and telecommunications, but
have no connection now or in the past with the payments industry.
I write these notes from a personal point of view as a user of
payment systems but with insight into information security techniques.
My response to the areas on which the committee
Trends over time in the use of cheques as a
payment mechanism, including estimates of likely usage over the
next five to 10 years.
I have no evidence to submit.
The advantages and disadvantages of abolition,
including the impact of abolition on particular groups in society.
The abolition of cheques will have a profound
effect on the elderly and infirm. For example, my widowed mother
resides in a nursing home. She is mentally active, but frail.
She does not have Internet access and her hearing is too poor
to use telephone banking. She is not mobile enough to be able
to visit a bank branch. My mother currently manages her finances
by post and uses cheques.
It is important for my mother's independence
that she is able to manage her finances for as long as she is
mentally able to do so. This means either that she should continue
to be able to use cheques, or that any replacement should be accessible
to her and others in similar circumstances.
Any replacement should not require a PIN (which
she would have difficulty remembering) or use cards or tokens
which she could not keep secure in the open environment of a nursing
The development of alternative payment mechanisms.
There are two requirements that must be met
by any future cheque replacement.
Firstly, any replacement for cheques must generate
an evidence trail of which a copy can be requested by the bank
customer and which is trustworthy enough for dispute resolution.
The terms and conditions of my bank's current
"We will keep original cheques paid from
your account or copies for at least six years unless we have already
returned these to you. Subject to this, if there is a dispute
about a cheque paid from your account, we will give you the cheque
or a copy as evidence."
There is no equivalent for electronic fund transfers,
which makes payment disputes difficult and expensive to resolve.
For a discussion see "Reliability of Chip & PIN evidence
in banking disputes", Steven J. Murdoch, Digital Evidence
and Electronic Signature Law Review, 6 (2009) 98-115.
Secondly, cheques have legal standing that is
not enjoyed by other payment methods. For example:
The effect of the Bills of Exchange Act 1882
is that if a bank debits a customer's account with a cheque which
has a forged signature, the bank must re-credit the account.
Where a PIN has been forged, perhaps because
a miscreant watches the PIN being entered and subsequently steals
the card, banks often refuse refunds. See Steven J. Murdoch's
paper cited above.
The Cheques Act 1957 has the effect that a cancelled
cheque or a certified copy is evidence of payment in the event
of dispute. I have very occasionally needed to use this where
a payee denies receipt of payment, or claims only partial payment
has been made.
Any replacement for cheques must have equivalent
legal standing as cheques, and necessary legislation must be passed
before the use of cheques is withdrawn.