Cheryl wrote a few bad checks her first year in college when she was 19. After some time she paid all the bank overdraft fees, and paid off the people who received those bounced checks. Her parents who were helping her insisted that she close the bank account. Three years later... she was about to graduated... a little older, and a little more mature. She tried to open a new checking account. Every bank she applied to rejected her because she had a negative record on file with ChexSystems.
This is a true story! Your personal story may be different... but this basic scenario is very common and has happened to thousands of people... including me. This is why I created this eBook. My Story
What happen to Cheryl, and to you, was when you applied to open a checking account, the bank or credit union ran your name to make an inquiry through a database that will tell them if you have had: frequent account overdrafts... bounce checks... did something banks consider as an "act of fraud" or otherwise have an unpaid balance owed to another bank on a closed account.
This database is maintained by a company called ChexSystems. They are kind of like the credit bureau to the banking industry. In fact they are actually considered a credit reporting agency very similar the main credit bureaus that we are all familiar with Experian, Equifax, and Trans Union. Financial institutions report to Chexsystems the names of individuals who they feel have mishandle a checking and/or savings account.
WHO IS CHEXSYSTEMS
A retail grocer who was tired of getting bad checks, came up with the ideal, and originally created what is now know as ChexSystems. He recognized business institutions needed a way to share information to help stop account abuse and fraud.
The ideal quickly caught on and rapidly grew. For nearly 30 years now, ChexSystems has been a central provider of account abuse and fraud information to the U.S. banking industry.
A company called The Deluxe Corporation purchased ChexSystems in 1984. Today, ChexSystems is managed by EFunds Corporation, an independent, publicly traded company.
ChexSystems is merely one of the companies that EFunds owns. Many people may not have heard of them, or ChexSystems, until that very moment when they are denied from opening a bank account.
EFunds Corporation principal activities are transaction processing, risk management and professional services to financial institutions & retailers, electronic funds transfer networks and government agencies.
The Group operates in four segments: Electronic Payments which provides electronic funds transfer, automated clearinghouse and other payment processing services, ATM Management Services which provides ATM deployment, management and branding services, Decision Support and Risk Management which provides risk management based data and other products, which ChexSystems is a part of. And other Professional Services which provides business process management and IT outsourcing services.
Efunds... the company that owns ChexSystems, Deluxe Corporation, also owns Current Checks (a.k.a. Checks Unlimited), Designer Checks, SCAN (Shared Check Authorization Network), the Debit Bureau, which tracks your check-writing history, and Deluxe Direct Marketing Services.
Though most of us have never heard of them... if you ever wrote a check, used a ATM machine, used a debit card, sent or received a money wire transfer, etc. etc; you have dealt with this very quiet and powerful company.
More information can be found out about Efunds, the company that owns ChexSystems at www.efunds.comHOW CHEXSYSTEMS AFFECTS YOU
When you apply to open a new account at a bank that is a member of, and uses, ChexSystems Inc. they will run a ChexSystems inquiry as part of their new accounts procedures.
If that inquiry returns any negative information, particularly if there is an unpaid outstanding balance owed to another bank, you will often be denied from opening that new account.
Then, if you attempt to try at another ChexSystems member bank... it is very likely that the exact same thing will occur again.Your CheckSystems report can remain in their database files for 5 years.
It is estimated that approximately 80% of all banks nationwide are members of ChexSystems. Finding a bank that does not use ChexSystems can be very difficult... but not impossible.
Critics of the ChexSystems database say that in many cases, it is arbitrarily used to disproportionately treat people. Many people in ChexSystems are not people who committed an intentional act of fraud; they’ve only had an incident, or two, of misjudgment.
They usually are of modest means. People who many banks assume will not maintain high balances in their accounts and will not be very profitable for the bank.
There has been an ongoing criticism that feels many banks are using ChexSystems as an excuse to weed out low-yielding customers. Denied access to checking, those stuck in ChexSystems are forced for five years to use expensive check-cashing services and to undergo the inconvenience of paying bills with money orders or cash.
The system currently contains approximately eight million names and is used by banks to track people with histories of checking account problems.Reports from those inside the banking industry say that on average associated administrative cost on new accounts can be approximately $200.
We all know the basic concept that banks make their money by lending out the money maintained in checking and savings accounts.
Those who have been reported to ChexSystems do, as a group, carry lower balances in their accounts. Often they are those whose payroll check is deposited on payday Friday, and at or near zero balance before next payday. Checking accounts do not generate a lot of revenue for the banks to begin with, and certainly not accounts that on average maintain a nominal balance.
By eliminating anyone with ChexSystems record, banks can inexpensively weed out those who they feel will cost more than they are actually worth to the bank.Critics of the system feel it has very little to do with your true risk as an account holder. It has everything to do with the bank's bottom line. Never mind the fact that millions of Americans are harmed in the process.
Why is this wrong?Banks benefit from the protection given to them with heavy government regulation. But with this benefit comes some responsibility to serve the public… something the banks are escaping, legally!
Government, by letting this continue, is failing its citizens who now have no way to exchange the benefits of their labor (e.g., direct deposit of their pay) for goods and services.
In addition, more and more landlords, and other organizations, are now requiring a checking account as a minimum requirement.If your name winds up in the ChexSystems database, you could find it extremely difficult to open a bank account.
It is very important to know that ChexSystems only maintains the database of names! The decision of whether, or not, to deny someone from opening a bank account is strictly up to the individual bank and their policies.
If you have been denied from opening a bank account, we know that it can create a number of major inconveniences in your life. However, there is assistance available to you! Most all of your options fall into one of three basic categories:
CHEXSYSTEMS REMOVAL Obviously the best scenario would be to have your name, and record, completely deleted from their database. Depending on individual situations, for some people this may not be as difficult as you may think. Of course, the person who did something like passing multiple checks on a closed account, or some actual act of fraud, is going to have a much more difficult time than someone who may have only had an oversight or two that resulted in overdrafts and they just didn’t realize what could happen because of it. We offer completely Free Chexsystem Help Tips that provides information, and advice, for getting removed off Chexsystems. Just simply sign up for this info. You will also receive Free Dispute Letters that has helped many people to be completely removed from Chexsystems. GET YOUR FREE DISPUTE LETTERS NOW
NON-CHEXSYSTEMS BANKS Some estimates say that over 85% of the banks and credit unions in the U.S. are members of Chexsystems. So finding a bank that dose not use them can definitely be a real challenge. But they are out there. In addition… some banks that do use Chexsystems are realizing that automatically denying everyone that has a Chexsystems report (over 8 million people) is simply not smart business. Those banks look at the circumstances of each case individually. Those banks have accounts with names like fresh start checking, second chance checking, etc.
USE OTHER PERSONAL FINANCE SERVICES If you really don't have a need to write a paper check, then many people don’t really need to use the banks at all! Anyone can get a Secured Personal Money Account with Direct Deposit of your paychecks, ATM cards with a VISA or MasterCard logo, Online Bill Pay Services that includes the ability to send anyone a check directly from your compute. No Chexsystems checks! Everyone is approved!
Personal Money Accounts
ChexSystems reports contain a variety of information used for determining qualification of a deposit account. This includes:
• If the applicant has an account closure on file
• Whether outstanding debts have been paid
• Validation of applicant’s social security information
• Validation and verification of applicant’s drivers license information
• Banks owed money by applicant (usually due to overdraft fees, ATM transactions, or automatic payments that were honored on insufficient funds)
• Multiple overdrafts within a short period of time
• Savings account, debit card or ATM abuse
• If the applicant has checks outstanding on the SCAN database (SCAN is a service used by retailers that keeps track of bank accounts and identification numbers from checks that have bounced)
• How many accounts the consumer has applied for in the past 90 days
• History of checks ordered in the past 3 years
Below is a sample of what a Chexsystems Report looks like. You can also view this sample report online. It will open up in a new window: Click Here
12005 Ford Road, Suite 600 Consumer Relations
7805 Hudson Rd Suite 100
Woodbury, MN 55125
August 9, 2010
JOHN C CONSUMER
5650 MIDDLE ST
ANYTOWN MN 55125
Please provide your Consumer ID number, along with your Social Security number, in any future contact with ChexSystems.
Personal Information
This section displays the names, date of birth and addresses associated with your ChexSystems consumer file.
01/20/1974
Names:
John Carter Consumer
John C Consumer
John Consumer
J C Consumer
Addresses:
5650 MIDDLE ST
MY TOWN, MN 55125
1623 CENTER ST
MY TOWN, MN 55125
123 MAIN ST
MY TOWN, MN 55125
645 JAY BIRD STREET
ANYTOWN, MN 55125
Consumer Reported Identity Theft Security Alert
In any future contact, you will be required to provide your password answer for as long as your Security Alert is active.
Name on Alert : JOHN C CONSUMER
SSN/ID : XXX-XX-6789
Password Question: WHAT WAS THE NAME OF YOUR FIRST PET? Status : NON-VALIDATED
Security Freeze Record
In any future contact, you will be required to provide your personal identification number (PIN) for as long as your Security Freeze is active.
Name on Freeze : JOHN C CONSUMER SSN : XXX-XX-6789
Status : Active
12005 Ford Road, Suite 600 Consumer Relations
7805 Hudson Rd Suite 100
Woodbury, MN 55125
Reported Information
Reported Information refers to reports of accounts that have been mishandled, reported for cause, and/or outstanding debts. Reported Information is submitted directly to ChexSystems by members of our service which consists mainly of financial institutions. Our current practice is to retain this information for a period of five years.
Source of Information: FIRST NATIONAL BANK 678 NORTH ST
ANYTOWN, MN 12345
800.888.1234
Reported Name: JOHN CONSUMER Reported Address: 123 MAIN ST
MY TOWN, MN 55125
Reported SSN/ID: XXX-XX-6789
Drivers License: XXXXXXXX9123 State: MN RTN: 123456789 Account: XXXXXX5209
Reported For: NON-SUFFICIENT FUNDS (NSF) ACTIVITY Closure Status: NOT REPORTED
Debt Reported: ChexSystems has no debt information available. May we suggest that you contact the source of the information to determine whether or not a debt is owed.
Source of Information: SECOND NATIONAL BANK 111 SOUTH ST
ANYTOWN, MN 12345
800.999.1234
Reported Name: JOHN C CONSUMER
Reported Address: 123 MAIN ST
MY TOWN, MN 55125
Reported SSN/ID: XXX-XX-6789
Drivers License: XXXXXXXX9123 State: MN
RTN: 123456789 Account: XXXXXXXXXXXXX0156 Date Reported: 05/26/2009
Reported For: NON-SUFFICIENT FUNDS (NSF) ACTIVITY Closure Status: ACCOUNT/DEBT SOLD
Closure Status Date: 09/24/2009
Source of Information: THIRD NATIONAL BANK 222 WEST ST
ANYTOWN, MN 12345
Telephone Number Not Available
Reported Name: J C CONSUMER
Reported Address: 1623 CENTER ST
MY TOWN, MN 55125
Reported SSN/ID: XXX-XX-6789
Drivers License: State:
RTN: 123456799 Account: XXXXXXXXXX6874
Date Reported: 05/27/2008
Reported For: NON-SUFFICIENT FUNDS (NSF) ACTIVITY Closure Status: UNPAID
Closure Satus Date: 05/27/2008
Debt Reported: Monies Owed
12005 Ford Road, Suite 600 Consumer Relations
7805 Hudson Rd Suite 100
Woodbury, MN 55125
Inquiries Initiated By Consumer Action
Inquiries Initiated By Consumer Action refers to inquiries resulting from a transaction initiated by you. These include applying for a credit card or completing an application at a financial institution. Please note that the inquiries are part of your credit history and may be included in our reports to others. These inquiries can be viewed for ninety days up to three years.
Inquirer: SECOND NATIONAL BANK 111 SOUTH ST
ANYTOWN, MN 12345
800.999.1234
Inquiry Date : 1/19/2008
Name Provided : JOHN CONSUMER SSN/ID Provided : XXX-XX-6789 Inquirer: THIRD NATIONAL BANK 222 WEST ST
ANYTOWN, MN 12345
Telephone Number Not Available Inquiry Date : 7/14/2007
Name Provided : JOHN CONSUMER SSN/ID Provided : XXX-XX-6789
Inquiries Not Initiated By Consumer Action
Inquiries Not Initiated By Consumer Action refers to inquiries resulting from transactions you may not have initiated, so you may not recognize the source. Members of our service with a permissible purpose include current creditors, pre-approval creditors, potential employers, and potential investors trying to assess risks. We report these requests only to you as a record of activities, and we do not include any of these requests on credit reports to others.
Inquirer : ABC COMPANY
233 EAST ST
ANYTOWN, MN 12345
800.555.3333
On behalf of: CELLULAR SERVICES 315 NINTH ST
ANYTOWN, MN 12345
877-555-1111
Inquiry Date : 10/18/2008
Name Provided : JOHN CONSUMER SSN/ID Provided : XXX-XX-6789
Retail Information
Retail Information refers to returned checks written on an account and certain collection accounts. Retailers and other businesses report this information to Certegy Check Services, Inc. ChexSystems receives this information directly from Certegy Check Services, Inc. and is not involved in the collection of these items. For additional information you may contact Certegy Check Services, Inc. by telephone at 800.437.5120 or in writing to Certegy Check Services, Inc., P.O. Box 30046, Tampa, FL 33630-3046
Date of Check : 03/10/2009
Check Number : 9278
Amount Of Check : $36.84
Date Check Paid : NOT PAID YET
RTN/Account Number : 123456789/XXXXX7654 Drivers License : XXXXXXXX9123
State of Issuance : MN
Payee : K&R Grocery
12005 Ford Road, Suite 600 Consumer Relations
7805 Hudson Rd Suite 100
Woodbury, MN 55125
Date of Check : 03/11/2009
Check Number : 9365
Amount Of Check : $156.29
Date Check Paid : 04/16/2009
RTN/Account Number : 123456789/XXXXX7654 Drivers License : XXXXXXXX9123
State of Issuance : MN
Payee : Amy’s Market
History of Checks Ordered
History of Checks Ordered refers to a record of check orders placed within the past three years.
Name: JOHN C CONSUMER
SSN/ID: XXX-XX-6789
Drivers License: XXXXXXXX9123
State of Issuance: MN
RTN/Account Number : 123456789/ XXXXXXXXXXXXX0156 Quantity Ordered : 150
Check Start Number : 501
Date Order Shipped : 12/07/2008
Source of Information : SECOND NATIONAL BANK 111 SOUTH ST – MAIL STOP 2
ANYTOWN, MN 12345
888.555.9876
Social Security Number Validation
Social Security Number Validation indicates the year and state that a particular sequence of digits first became available for issuance by the Social Security Administration. This information does not include the name of the individual to whom the number was issued.
XXX-XX-6789 Became Available for Issuance in 1980 in the State of MN
ChexSystems Contact Information
To obtain answers to the most frequently asked questions, please visit our website at www.consumerdebit.com . If you have questions about the information contained in this report, please contact us at the address or information contained in this report, please contact us at the address or 2197.
Notices
You have a right to dispute any item of information contained in your consumer file. If you believe information in your file may be inaccurate or incomplete, please submit your dispute to the address or fax number listed above. Please be certain to include your Consumer ID number, the source of the information you are disputing and the nature of your dispute. Under normal circumstances, ChexSystems will inform you of the results of the investigation within approximately 30 days (21 days for residents of Maine).
You may be entitled to place a statement of dispute on your consumer file. Your statement must not exceed one hundred words (200 words for residents of Maine). Your statement must not include the names of other individuals or businesses. Your statement must pertain to the information contained in your consumer file and must not contain profanity. You may submit your statement to the address or fax number listed above. Please include your Consumer ID number and specifically indicate to which item of information you wish to add the statement.
You may have a right to place a fraud alert and/or security freeze on your consumer file. To obtain more information or to place an alert or freeze on your consumer file at ChexSystems, please visit our website at
www.consumerdebit.com. If you are a current resident of AK, AR, CA, CO, DE, DC, FL, GA, IN, MD, MA, MO, MT, NH, NJ, NM, NY, NC, ND, OH, OK, RI, TN, VT, VA, WV, or WI there may be additional rights and information available to you. Please visit our website at ww.consumerdebit.com and select the “Security Freeze” link or contact us at the address or telephone number listed above to request a written copy of any applicable state notices.
12005 Ford Road, Suite 600 Consumer Relations
7805 Hudson Rd Suite 100
Woodbury, MN 55125
By submitting your personal information to ChexSystems, you acknowledge your agreement to provide accurate identifying information and your understanding that ChexSystems may access, store, and use this information to the extent permitted by law.
OBTAINING YOUR CHEXSYSTEMS REPORT
You can obtain your ChexSystems Report by mail or by Internet. The fee for your ChexSystems Report is $9.00. However most people will not pay this fee… because they meet the criteria listed below to receive a free copy of the ChexSystems report.
To order your ChexSystems Report online you must have a major credit card… OR… meet the criteria for a free report listed below.If you do not have a major credit card, or do not qualify for the free report, then you can send a check or money order for $9.00 to ChexSystems at the address below.
You must include your full name, date of birth, Social Security number, and current address, former addresses from the last 5 years and copy of a utility bill, or something that indicates your current address.
If you have been declined from opening an account at a bank within 60 days you can obtain your report for free.Obviously, the only reason why most people start looking for information about Chexsystems to begin with is because they just got denied from opening a bank account.
In addition to this:FACTA Free Annual Report
Under the Fair and Accurate Credit Transaction Act (FACTA) amendments to the Federal Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer report, at your request, once every 12 months.
So you can see why most people never pay for their Chexsystems report. You can easily request your report online. You must provide the name of the bank or credit union, and the exact date they declined you:
ChexSystems
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
1-800-513-7125
Order Your Chexsystems Report Online
• If you have been the subject of an adverse decision, such as denial of credit, insurance or employment within the past 60 days
• Residents of Georgia are entitled to two (request credit report by mail).
• If you are unemployed and intend to apply for unemployment in the next 60 days.
• If you are on public welfare assistance.
• If you have reason to believe your file contains inaccurate information due to fraud.
Obviously since the absolute best outcome is to have your name completely removed from ChexSystems; this section has tips, advice, and suggestions to accomplish that.
It should go without saying that everybody’s individual situation and circumstances will be different. For some people using the information presented, it will be easy for them to get their name removed from ChexSystems. For others it may take some time, effort and diligence.
Overall depending on the circumstances ChexSystems removal can be a little easier than credit repair. Most banks and financial institutions are very poor record keepers. This makes it very difficult for them to validate account information and provide written proof that the account you are questioning belongs to you. Use that your advantage.
As said before in this