ChexSystems Dispute: Step-By-Step Guide

Consumers have the right to dispute any information contained in the ChexSystems report.

ChexSystems, just like other credit bureaus, is considered a CRA (consumer reporting agency) and it is governed by the Fair Credit Reporting Act or FCRA. Being a credit reporting agency, it means that consumers reserve the right to dispute any information contained in the ChexSystems report. After you submit any dispute report, they must investigate it within 30 days. Where the disputed item fails to be verified by the reporting credit union, financial institution or bank, it will immediately be deleted from the ChexSystems Consumer Report of the person who initiated the dispute.

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By Kelly Scott
Updated: Jan 14, 2022

The ChexSystems Dispute Process

The law gives ChexSystems 30 days from the time that you make your dispute to carry out a detailed investigation. In case you got your ChexSystems report by virtue of reporting it the FACTA Annual Report, the law provides for 45 days in which to respond to the dispute.

Dispute by Mail

It is best to write a letter of dispute and then send it through certified, return receipt U.S mail. The problem with disputing online is that it makes it difficult to generate a paper trail should you require it later.

Dispute by Phone

You can also call to dispute something in ChexSystems report. If you do, ChexSystems will always try to get as much information from you as possible. This includes information about your employer as well as the banks that you have had accounts in the last 5 years.

As a caution, you should NEVER supply ChexSystems with more information than is necessary for them to gain access to your files. You need to remember that ChexSystems are just like any other consumer reporting agency and that the information you give them only helps them but not you.

The Fair Credit Reporting Act stipulates that the only information that you need to supply for your identity to be confirmed is your name, present address, Social Security Number, date of birth the account number and bank name. Never give them your bank history for the last 5 years.

Verified Disputes

After receiving a dispute request from you, ChexSystems must prove that they contacted a person at the financial institution to ascertain the information under dispute. The verified information will remain in the file of the customer for up to 5 years. ChexSystems are obligated to explain their method of verifying the dispute.

FCRA gives consumers the right to know the manner in which the dispute(s) was confirmed. You can send another letter requesting that the disputed item be validated. Validation ought to include name, telephone number and address of the person or business who verified that that dispute was accurate.

Have a proper timeline as well as all return receipt cards from post office. Where ChexSystems is unable to verify the manner in which they confirmed your dispute, they must erase the item.

Unverified Disputes

In case ChexSystems fails to respond to the dispute that you filed within 30 days, the disputed item must be removed. If you want to confirm the time that ChexSystems received your dispute, all you need to do is check green return receipt that you got at the post office.

Lack of response indicates that they were unable to confirm the item, meaning that it must be removed. Also, you need to send another certified correspondence to ChexSystems demanding that they delete the item as a result of not responding in time as stipulated by FCRA.

First Dispute with ChexSystems

It is advisable to first dispute with ChexSystems before taking action with the bank. After you dispute an item, ChexSystems will have 30 days or one month within which to finish their investigation. You could be lucky if the bank fails to respond within the stipulated 30-day period as a result of which the dispute entry is deleted.

Another good thing with first disputing with ChexSystems is that it enables you to create a paper trail should you require it later for legal action. According to FCRA, ChexSystems can report only “accurate” information.

Types of Inaccuracies that you can dispute

Because the FCRA Rules oblige reporting agencies to accurately report all the negative items, it is important that you scrutinize the ChexSystems report to see if there is any inaccurate information that you can use to have the item erased from your file. These include:

  • Date you were reported to ChexSystems by your bank;
  • Date you were first notified by the bank that the account was negative.
    This enables you to determine the time that the Statue of Limitations starts;
  • Does ChexSystems report personal data like social security number, name, and address accurately?
  • Are you the main account holder? If not, did you sign a signature card for the account?
    Ask for your signature card’s original copies. Where the ChexSystems fail to give you proof, they have no option but to delete the item.

Anything other than accurate reporting violates the FCRA Rules which necessitates the removal of the item. Even clerical errors are included here. Scrutinize your report very closely to look for any errors.

In case you do not succeed with having an item deleted after you have disputed it with ChexSystems, you may want to dispute it directly with your bank. Banks also comply with the rules of FCRA when reporting negative information. In case you want to settle, you can negotiate and pay for deletion. Before sending any settlement funds, make sure you have a written agreement.

You always hope that you don’t have to take legal action. However, should all your efforts fail this might be the only route to go. Many times, simply by filing a small claims suit and sending a copy to Chexsystems, they may remove your negative information in exchange for dropping the lawsuit, as it likely isn’t worth their time or money to fly lawyers out to a court in your area.

Ensure that you have a good paper trail. Have all copies of your letters as well as return receipts. You need proof that you notified ChexSystems of any errors properly and that they failed to correct the mistake.

You can also clear ChexSystems report by making a plea to your bank directly for removal. You can succeed by just asking. You can best use this method if you settle or offer to settle the figure in question when you are requesting a removal. The aim is to show that they failed to correct the error and that this has harmed you by preventing from opening a checking account. This might have subjected you to expensive financial services.

Proactively Getting Out of Chexsystems

If you have exhausted the above methods, or feel compelled to take more direct action that has worked for thousands of people, be sure to check out our Free Chexsystems Removal Guide here.

Rooting for ya,
Kelly Scott