How to Handle Checking Account Problems

Jeanette A. Tucker, Bollich, Patricia A., Braud, Emily  |  10/4/2004 4:26:33 AM

Have you ever been denied a bank account when you tried to open one? How do banks find out about your past account history? What can you do if you are denied a bank account because of incorrect information? LSU AgCenter family economics professor Dr. Jeanette Tucker looks at these serious questions.

Many banks and credit unions regularly contribute information on mishandled checking and savings accounts to agencies called account verification companies. This information is shared among member institutions to help them assess the risk of opening new accounts. Member institutions report the names of account holders whose accounts have been mishandled.

Tucker says the reasons for reporting normally include a history of account mishandling or an outstanding debt. So, if you ever overdrew your checking account and abandoned it while it still had a negative balance, you might be listed in an account verification company’s database.

Account verification companies are consumer-reporting agencies governed by the Fair Credit Reporting Act and other laws. Account verification companies neither approve nor decline new account openings. These decisions are entirely up to each financial institution and their individual policies.

Reports about overdrafts or closed accounts remain on file for five years, unless the bank or credit union that filed the report requests their removal, or the account verification company becomes obligated to remove it under applicable law.

Tucker says the major account verification company is ChexSystems. Other account verification companies share data with it. They include ChekFax, TeleCheck and CheckCare.

Consumers can order a copy of their report from ChexSystems by calling 1-800-428-9623 or ordering it online at www.chexhelp.com. The reports costs $8 in Louisiana. Consumers can obtain a free copy of their ChexSystems report if they have been denied a bank account in the past 60 days because of information provided by the company, if their checks have been stolen and used by an imposter or if they are victims of another type of bank fraud.

The report will include the following records:

  • Reported information. This section contains reports of accounts that have been mishandled by the consumer or reported for outstanding debts or bank fraud committed by the consumer. The information is submitted by financial institutions that subscribe to the account verification company.
  • Driver’s license validation. Each state discloses how it configures driver’s license numbers to help businesses spot forged licenses.
  • Driver’s license verification. This includes the name and date of birth of the individual to whom a driver’s license number was issued.
  • Consumer-initiated inquiries. This lists the companies given permission to check banking and credit history, such as from credit applications.
  • Customer-initiated inquiries. This section can include the names of your existing creditors or companies who pre-screened you to find out if they wanted to offer you a credit card or other bank product. Companies must have a legally permissible purpose to access this information about you. These listings are seen by you, but not by the companies who are allowed access to your report.
  • Retail information. This information is provided by a company called Shared Check Authorization Network (SCAN). It lists returned unpaid checks you have written to merchants and other businesses who report it to SCAN.
  • Check printing order history. This is a list of the check orders placed within the past three years. Its purpose is to help counteract check fraud.

If you believe your file contains errors, Tucker says to submit your dispute in writing to ChexSystems Consumer Relations department for assistance in disputing information. Agency representatives will investigate the claim and notify you of the results in approximately 30 days. If errors are discovered, they will be rectified immediately.

If the reinvestigation does not solve your dispute, you are entitled to request that a brief statement be added to your consumer file outlining the nature of your dispute. Send a statement in writing to the account verification company.

Clearly indicate that you want the statement added to your file. Be sure to sign your request. If you want help in writing a clear summary of your dispute statement, contact the account verification company.

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