The week unzipped: No more guarantee cards - and no guarantees yet on the future for cheques

CHEQUE guarantee cards are to be phased out on Thursday, after which banks will no longer assure small businesses, such as hairdressers, newsagents and windowcleaners, that payments will be made after the production of one. Consumers will still be able to write cheques, but businesses will no longer have the cheque guaranteed, so may have to consider alternative means of security. Many have already moved to chip-and-pin debit card payments.

However, the Payments Association said there were no immediate plans to withdraw the cheque service as well.

There is a date of 2018 which has been nominated for the possible ending of cheques. But the decision about whether cheques have come to the end of their useful working life will not be taken until 2016.

Housing review held

The Financial Services Authority is to delay publication of its mortgage market review amid concerns of the impact it might have on house prices.

Chairman Lord Turner last week expressed concerns that attempting to protect consumers against the worst impact of property booms could lead to restrictive lending.

He said it was deciding whether to protect 15 per cent of borrowers who may default while stopping the other 85 per cent from taking on a tough but affordable commitment were difficult decisions and required more work. Elsewhere, consumer lobby group Which? expressed concern at the high number of mortgage borrowers who are now on variable rather than fixed rate mortgages.

Stretched borrowers normally opt for the security of a fixed deal which gives them certainty over repayments. However, as fears about rising interest have abated, more borrowers are taking a risk with their monthly repayment.

Tesco Bank chaos

Thousands of Tesco Bank customers had their service badly disrupted last week after the bank transferred savings accounts across to a new system. Many were locked out of their accounts for up to three days after the online system failed, causing chaos under the weight of hits on the system.

The bank has apologised and says it will reimburse people who can prove they lost out financially as a result of the confusion. Some were unable to pay bills which might have incurred penalty or overdraft charges elsewhere.

Users of the Internet Explorer 9 browser were the most likely to be experiencing compatibility issues with the Tesco Bank website, and were advised to use a different browser such as Firefox or Google Chrome.

Family friendly

Scottish Friendly has a new range of tax-free investments for families, aimed at cushioning the loss of child trust funds, which are free of income and capital gains tax provided the investments are held for ten years. Every family member can invest between 15 and 25 per month tax free, with savings accounts available for parents to invest for themselves, for their children or for other people's children.