National check approval systems are a bane for consumers who bounce checks and get blacklisted
 
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National check approval systems are a bane for consumers
who bounce checks and get blacklisted.

San Diego, CA -  Someone is watching all those bounced checks and other overdrafts created by debit and ATM card use. Just like too many late payments on credit card accounts will bring about higher rates of interest and having the account closed by the issuer; and just like too many speeding tickets will cause the loss of a driver's license; also true is too many bounced checks and overdrafts will cause a bank or credit union to close an account.

Well, just go to another financial institution you might say. Not so fast. The other banks and credit unions likely already know about the overdraft history and closed accounts. How could that be?

The people watching the bounced checks, overdrafts, account closures have names like ChexSystems and TeleCheck. These companies offer check approval, guarantee and verification to banks, credit unions, retailers, and grocery stores, who in turn use it determine whether or not they will accept a consumer's check or if a credit union or bank allow them to open a new account. This is a another bane for consumers unfortunate enough to have had insufficient funds activity on their checking accounts, even if it was the result of fraud or identity theft. They could be blacklisted for up to five years.

ChexSystems is among the nation's largest groups collecting data on closed-for-cause accounts from some 90,000 credit unions and banks. ChexSystems and companies providing similar services are regulated by the Fair and Accurate Credit Transactions Act (FACTA) in much the same manner as credit reporting agencies.

Just because these companies are subject to the same disclosure and reporting requirements as the major credit reporting agencies, consumers rarely know about or monitor their records on these check approval systems. Further, those that have their checks refused because of mistakes or fraud on their report, often encounter great difficulty in clearing their name.

Banks and credit unions rely on these reporting firms to help screen applicants for new checking accounts. One reason is checking accounts don't generate much income and if too many scofflaws get accounts the exposure to fraud is greatly increased. It is estimated banks lost $1.6 billion in 2002 and merchants lost some $15 billion to bad checks.

If a listing happens in error, most of the companies, ChexSystems included, will help correct things with the bank and remove the name from the database. To order a check report, contact the companies through their Web sites or their 800 telephone numbers listed below. Most consumer reports range from $0 - $8 depending the state of residence, If there is a file, it would contain negative information about bounced checks and evictions from apartments, as two examples. Many consumers will not learn about these files until they have had a check submitted for approval of a purchase denied.

If a consumer finds a mistake in their file, they must contact the company on the Internet or write a letter of dispute, have it investigated and receive a written report on the results. Consumers should also report the fraudulent use of checks IF they have been the victim of check forgery resulting in non-sufficient funds (NSF) activity on any checking/share draft account(s).

ChexSystems (www.chexhelp.com) 1-800-428-9623

SCAN (www.scanassist.com) 1-800-262-7771

TeleCheck (www.telecheck.com) 1-800-710-9898

About Checking is a pilot program from the University of Wisconsin, who collaborated with credit counselors and other consumer advocates to help consumers who end up in the database by their own hand with the About Checking course. People must attend a class, successfully complete it, and pay off all outstanding debts arising from the bad checks. Next, participating banks or credit unions will open a new account and give them a second chance. For more information visit: www.aboutchecking.com.

For those caught in the NSF check database, there is also a listing of banks and credit unions that do not use ChexSystems.  

For more information you may visit the ICFE web site at: www.financial-education-icfe.org or call: 619 239 1401.
 

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

About the ICFE:

The Institute of Consumer Financial Education (ICFE), founded in 1982 by the late Loren Dunton (creator of the 'certified financial planner' (CFP) designation) and it is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. The ICFE trains and certifies Personal Finance Instructors for its own curriculum. It also trains and certifies Credit Report Reviewers and Identity Theft Prevention Specialists.

The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, now in its 16th printing and has distributed over one million 'Credit/Debit Card Warning Labels' and 'Credit/Debit Card Sleeves' world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.

The ICFE is also a partner in the national Jump$tart Coalition for Financial Literacy and the California Jump$tart chapter. The ICFE staff is also active with San Diego Saves, an offshoot of America Saves, and the California Student Debt Resource Awareness Project (CASDRAP) (studentdebthelp.org).

The ICFE's on-line help for consumers who spend too much was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from 'The Money Instruction Book,' a course in personal finance, positioned to become among the premier programs in the new bankruptcy and debtor education initiatives.

The ICFE Web site at: www.financial-education-icfe.org helps consumers with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and videos and how to teach children about money. Other ICFE services include a free eNews, and an online resource center of financial education learning tools, including videos, books, software and personal finance courses.

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