Credit Infocenter

ChexSystems - Overdraft Violations, Banking Regulations

What is ChexSystems?

Last Updated: January 29, 2012

We are NOT CHEXSYSTEMS.

Don't call us, WE CANNOT HELP YOU. Everything we know about this company is on this page. Please read it. If you want to call them, here is the number: (800) 513-7125.

I've had a number of people write me and tell me that they have been unable to open a checking account because of ChexSystems. I've decided to check it out for myself and it seems to be valuable information.

How ChexSystems Works

U.S. banks and credit unions report incidents to ChexSystems to protect themselves and other banks in the future. You get reported to ChexSystems if your account is closed for "cause." What is "for cause?" Banks differ greatly between them as to what valid reasons are for closing an account. Here are some examples:

Each incident stays on your record with ChexSystems for FIVE full years from the date the incident was reported. You are entitled to see your Chexsystems Report once a year for FREE, just like you are entitled to a free credit report from Experian, Equifax and Transunion.

Getting an incident reported to ChexSystems is the Kiss Of Death for your financial future. Most banks now say: "Our bank policy is that we will not open a checking account for you if you have one or more incidents reported to ChexSystems." Scary.

Do Banks Open Accounts & Close Them Later?

It seems more common among some banks than others. Some banks have online applications that will approve immediately. Then the bank will wait until the signature card is sent in to actually look at the ChexSystems report. At that point, they will send back the initial deposit and close the account.

Then there are other banks that do "sweeps" on accounts. This is where a bank, generally the loss prevention department will do a random check on accounts with chexsystems. If they find that the customer has a chexsystems record, they then will determine that they person may be a risk and they will freeze account, and later close it.

For more details about this system and what to do if you get reported, check out these excellent resources:

Non-ChexSystems Banks

Want to find a non-ChexSystems bank? Here are some free resources (yeah, they're REALLY free). However, bank policy changes ALL of the time, so you should call these banks first to see what their current policy is.

ChexSystems for Members

Banks and credit unions can call (800) 328-5120* or (800) 328-5122* to reach ChexSystems' Inquiry Department. At this number, your banker (but not you) can obtain the details in your record immediately.

There are 2 other major specialty companies that report on check writing history:

Shared Check Authorization Network (SCAN) maintains a database of returned checks and instances of fraud. It provides check authorization and verification to member retailers.
Toll-free number: (800) 262-7771 (U.S., Guam, and Puerto Rico)
Fax: (800) 358-4506
Web: www.consumerdebit.com

TeleCheck Maintains a database of returned checks and instances of fraud. It provides check authorization and verification to member retailers.
Toll-free number: (800) 209-8186.
Web: www.telecheck.com.

Jan 10, 2009 update:
You are entitled to see your Chexsystems Report once a year for FREE online.

Call 800.461.0524 and speak to a Credit Repair Expert at Lexington Law
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