Getting Around ChexSystems
Resources to Help Those Who are Caught in Chexsystems
What is ChexSystems?
Answer: ChexSystems is a service provided to banks by
Deluxe Corporation. Their database keeps track of negative information regarding
checking and savings accounts. Negative information usually consists of NSF
(non-sufficient funds), which is also known as bouncing checks. Unpaid
overdrafts are also a major contributor to the database.
Minor mistake, major consequences
Sometimes it doesn't take much to land on ChexSystems'
list of naughty account-holders. A vocal critic of the agency says his former
bank reported him to ChexSystems after an insurance company automatically
debited $60 from a closed account. On the other end of the spectrum, ChexSystems
alerts a bank when an account applicant furnishes a phony Social Security number
or when the applicant has a history of fraudulent check-kiting schemes.
Critics complain that
financial institutions use
indiscriminately, weeding out not only checking-account applicants who intend to
commit fraud, but also law-abiding people who wrote a bad check or two by
mistake, or who were irresponsible with their checking accounts but have since
learned their lesson. They want Congress to specify which offenses merit
reporting to the agency.
ChexSystems report stays in the database for five years and can doom your
chances of getting a checking account for that period. ChexSystems has records
of 19 million accounts closed for cause. That's one record of a closed account
for every 14 U.S. residents.
percent of U.S. banks and credit unions belong to the ChexSystems network, which
testifies to the agency's importance in preventing fraud and losses to hot-check
writers. Financial institutions lose $15 billion a year because of check fraud
and abuse, according to ChexSystems. The agency estimates that every dollar
spent on fraud protection saves $6 in administrative costs, a savings of
hundreds of millions of dollars a year.
Speaking softly, carrying a big stick
For all its clout, ChexSystems wields its power quietly.
Many people who ended up in its database never heard of it until they tried to
open a checking account and were turned down because of their ChexSystems file.
Most have much difficulty finding a bank that will let them open an account
because someone with a ChexSystems file is considered more likely to be a fraud
If you are reported to ChexSystems
close any savings accounts or other checking accounts, and keep the balances
in the black.
overdraft fees as soon as you can.
on the checks
Once you have paid the
overdraft fees and you have satisfied everyone who received a bounced check, get
a short explanation inserted into your ChexSystems file. Thomas Bledsoe,
questions the fairness of the file hanging around for five years like a stale
but juicy rumor.
"My life has
been a living hell because of ChexSystems," he says, although he acknowledges
that he shares the blame: "The reason I am in ChexSystems is best summed up by
irresponsibility of youth," he admits.
wrote a host of bad checks when he was 19. He says he paid his overdraft fees
immediately and paid the recipients of the bounced checks. His mother persuaded
him to close the account so he wouldn't wreck her financial future. Three years
later, Thomas tried to open a checking account. Banks rejected him based on his
record of bad checks on file with ChexSystems. Thomas believes that ChexSystems
performs a valuable function by protecting banks from the unscrupulous, but he
is angry at the agency for keeping files on people for half a decade after
making honest mistakes.
"I do think
that five years is a little harsh and maybe they should shorten it to one or two
years," he says. Only by making repeated calls did he persuade the bank to
report to ChexSystems that he had repaid the $60 and overdraft penalties. "I had
gray hair and no fingernails after a week of this," he says. Thomas criticize
ChexSystems for what he says is a lack of accountability to consumers, although
they have no kind words for their banks, either.
least, bank and credit union managers have the option of letting customers open
accounts even if they are listed in the ChexSystems database.
always try to convince the new-accounts manager that your business is worth the
risk. Keep in mind, though, that one of the products that ChexSystems offers is
Audit Check, which tracks cases in which managers overrode a negative report
from ChexSystems and let a customer open an account anyway. With upper
management peering over the new-account manager's shoulder, you might not be
worth the potential hassle. Finally, you can try to find a bank or credit union
that doesn't use ChexSystems through our service. Studies show 80 percent of
financial institutions use ChexSystems; so ferreting out an institution that
doesn't use ChexSystems can be a challenge.
"gem" of a bank
An institution that
doesn't use ChexSystems is so hard to find "that it's a gem when you uncover
it," says Thomas. Thomas feels that he found a gem with our service. In
September he began looking for a bank where he could open a checking account,
and he finally found one with our help.
didn't use ChexSystems!" Thomas stated.
"Things went well with the Bank," he says. "I didn't have any problems." There
is one final irony: the bank we found for him did not let him choose which
company would print his checks. "No problem", said Thomas, "I felt blessed just
to get the checking account open!"
You're About to Learn
How to get a new
checking account if you are currently listed in ChexSystems. We keep a fresh
updated list of over 100+ FDIC Insured Banks nationwide that have been known to
give checking accounts to people in ChexSystems, complete with contact
information. Many have online applications and offer Visa Check Cards and/or ATM
only one requirement for our information to work if you are listed in
ChexSystems. You must have two valid forms of identification, such as:
1. A Driver's License or
2. A Social Security Card.
Our mission is to educate consumers about secured and unsecured credit and options available to them.
We believe that if you don't know your rights, you donít know your options.
Join Us Today, We have been successfully helping consumers with Debt Resolution and Credit Repair more than 10 years.
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