If you thought the credit bureaus were invasive of your privacy, youdon't want to read about the latest bureau to appear, and it's beenaround for several years.
You know how someone watches everything you do when it comes to yourcredit cards and use of other credit items? Well, there areorganizations out there that are watching all of your bounced andreturned checks and those other overdrafts created by your debit andATM card use.
If you have late payments on your credit cards you are subject tohigher rates of interest and possible closing of the account. In thesame way too many bounced checks and overdraft charges will causebanks and credit unions to close your bank account.
I know many of you are saying to yourself: "Self, why not just goanother bank or credit union and open another account?" The answer is- the other institution already knows about your history of rubberchecks and closed accounts. Once again you're talking to yourself:"How?"
With names like ChexSystems and Telecheck you can figure out who iswatching you and your checks. These companies do such things as offercheck approval, guarantee and verification to banks, retailers,credit unions and other companies who accept checks as payment. Thesestores and banks then decide if they will accept your check or allowyou to open a new account with them.
Just as negative information can stay on your credit report forseven years, you can be blacklisted by negative check information forfive years. Unless you are aware of this bureau, even negativeinformation from fraud or identity theft will stay on record hurtingyour checking reputation.
The Fair and Accurate Credit Transactions Act (FACTA) regulatecompanies providing services such as closed-for-cause accounts andother information collecting services in much the same way as creditreporting bureaus. Despite these regulations subjecting ChexSystemsand similar companies to the same disclosure and reportingrequirements as credit reporting agencies, many consumers arecompletely unaware about these check approval systems.
In this case, ignorance is not bliss because most consumers don'tknow to monitor their records on these check approval systems. Ifmistakes or fraud in your report have been the cause of your checksbeing refused in the past, you will likely have trouble clearing yourname.TeleCheck to screen new account applicants.
A major reason is income generation - checking accounts don'tgenerate much income and if too many criminals open checking accountswith an institution, their exposure to fraud is greatly increased. Soit is in the best interest of the bank to err on the side of cautionand refuse to open a new checking account if you have negativeinformation on your report. The thinking goes like this: It is betterto turn away 1 legitimate customer who's report is marred by identitytheft, than to open an account for a fraudster who'll bounce checksand bilk the bank out of thousands of dollars. In 2002 alone bankslost an estimated $1.6 billion and $15 billion by merchants due tobad checks.
Most of the companies will help you correct errors in your listings,even helping correct things with the bank and removing your name fromtheir database. Go to the companies Web site or the 800-telephonenumber and request a report. Depending on the state of residence,your report will cost between $0 and $8.
Unlike your credit history report, there will be a file withChexSystems and these companies only if there is negativeinformation. In this case, no news is good news. Two examples ofnegative information would be bounced checks and apartment evictions.Unless you check your report yourself, you will not learn about thisnegative file until a check is denied acceptance at the checkoutstand.
If and when you find errors in your file, you must contact thereport generating company on the Internet or write a letter ofdispute. You need to have it investigated and receive a writtenreport on their findings. You must also report the fraudulent use ofchecks when you have been the victim of check forgery resulting innon-sufficient funds (NSF) activity on any checking/share draftaccount(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
Roger Sorensen
America's Financial Guide can be found at ==>http://www.Slave2Work.com Subscribe to Money Basics via http://www.slave2work.com/ezine.html
Slave2Work.com - Are you ready for financial freedom?