This is the second installment of my series on specialty consumer reporting agencies and how to request your free file disclosure every year. You can read the first installment here.
Bounced checks or account overdrafts typically don’t appear on standard credit reports unless the balance has been turned over to an outside collection agency. But before a financial institution opens a new account for a prospective customer it wants to know that the person hasn’t had problems handling accounts elsewhere, or worse, is trying to commit fraud. Retailers also want to avoid bounced and fraudulent checks. That’s where these specialty agencies come in. They collect and report information about mishandled checking and savings accounts.
Chex Systems, Inc. collects information from member financial institutions and shares it with them to “help them assess the risk of opening new accounts.” A Chex Systems report can include personal identifying information, negative information such as checks returned for non-sufficient funds (NSF), inquiries into the file by financial institutions or the consumer, a history of checks ordered, and information about checks bounced at retailers as reported by Certegy Check Services, Inc. (see below). Chexsystems only maintains negative information for five years.
Certegy Check Systems Inc.
Certegy describes itself as “a check risk management company that provides verification, guarantee and risk analytics to thousands of businesses that choose to accept checks as a form of payment for goods or services. “ In other words, merchants use their service to help them decide whether to accept individual checks.
Certegy doesn’t make the actual decision of whether to accept or reject a check. That’s left to the merchant. But they do help the merchant make that decision. If you have had a merchant who uses Certegy decline a check, the company recommends you complete and submit a Certegy Gold Application. It’s free, and allows them to assess additional information not provided with your original check transaction. Certegy says the Gold Application can help consumers avoid most check declines. The form is available at Askcertegy.com.
In addition to a free annual file disclosure, Certegy offers a free declined check lookup service on its website.
[Resource: What You Need to Know About Bounced Checks.]
TeleCheck describes itself as an industry leader in “check acceptance, check processing and risk analytics services to thousands of retailers and financial institutions.” It offers a service called TeleCheck Electronic Check Acceptance® that authorizes check transactions and converts paper checks into electronic items at the point of sale. If you’ve ever made a check purchase where you paid by check but were given an electronic receipt of the transaction to sign, then you have seen this system in action.
Telecheck will analyze a transaction against its database of bank and checking account information, and use risk-based decisioning tools to alert merchants to potential fraud before they accept individual checks. You can think of it as similar to the way creditors use credit scores but Telecheck doesn’t check standard credit reports or scores to make decisions. It also doesn’t check the balance in an account when a check is presented. If risk factors are identified, it is possible for a check to be labeled as risky even if the account holder has never bounced a check before.
To review your reports:
You are entitled to a free copy of your report though these nationwide consumer reporting agencies every year. Note that if you aren’t in their systems, they won’t be able to supply you with a report.
Chexsytems: 1.800.428.9623, or ConsumerDebit.com
Certegy Check Systems Inc.: 1-866-543-6315 or AskCertegy.com
Telecheck/FirstData: 1-800-366-2425 or FirstData.com
Next week: In the third installment in this series I’ll explain how to get copies of insurance scores and reports.
To read the full series on Specialty Consumer Reports, you can find them all right here at Credit.com:
Image by oblivion9999, Flickr