Chexsystems Removal Guide

We’ve helped lots of people get out of ChexSystems – Free!

Step-By-Step Guide To Get Out Of ChexSystems

ChexSystems is an association of financial institutions that network together in order to develop a database that maintains the records of mutually unwanted customers. To make sure that only financially responsible individuals open up checking accounts at member institutions, these banks report on customers who demonstrate poor financial management skills. When a customer’s checking account is closed due to demonstrated mismanagement, then he or she is reported to ChexSystems. Once done, the customer will have a very difficult time opening up an account at any other financial institution partnered with ChexSystems for the next five years.

You can contact Chexsystems at:

ChexSystems Consumer Relations
7805 Hudson Road
Suite 100
Woodbury, MN 55125
Ph: (800) 428-9623, (800) 513-7125

*NOTICE* – We are not lawyers, and nothing contained here should be construed as legal advice! We can only offer our educated opinions. If you need legal advice, please contact a lawyer.

Step 1

Go to the ChexSystems official website at and request a copy of your ChexSystems report. By law, they are required to send you a free copy.

Step 2

After you receive it, make a copy of Letter # 1 listed below, editing your own personal details where necessary. Place the letter into an envelope and go to the post office.

*IMPORTANT* – You must send the letter you copied below via CERTIFIED MAIL, with a return receipt requested. This will not only ensure its delivery, but you will have a documented time of when it was received. This is very important because ChexSystems is governed by the FAIR CREDIT REPORTING ACT as a consumer reporting agency. By law, they have to investigate and verify any disputed information within 30 days. If they fail to respond or verify your information, all disputed information MUST be removed. Almost all times, they fail to do so within 30 days, and your information must be DELETED!

If they do send you a letter verifying your disputed information within 30 days, then the next step is to send Letter # 2 below. You will be sending the letter via certified mail, return receipt requested, so the 30 day clock starts ticking the moment they sign for your letter, showing the time stamp of when they received it. If they fail to respond to your initial letter within 30 days, go ahead and send Letter # 3 below. If your information is verified, or you do not hear back within 30 days, you should ALSO send Letter # 4 at this time, which should be mailed to the original bank that reported you to Chexsystems.

Printing the letters. Copy and paste each letter into a word processor like Microsoft Word. Then make the changes necessary to personalize it. Note that there is a section at the bottom of each letter that says “cc: enter attorney’s name here”. I did not have an attorney, as I represented myself, however I did add a made up attorney name here to let them know I was a little more serious than the average Joe. Feel free to do this at your discretion.

Please be sure to read our additional notes as well, located after the sample letters below.

LETTER # 1

This is Your Original Dispute with ChexSystems.

Your Name
Your Address

ChexSystems Consumer Relations
7805 Hudson Road
Suite 100
Woodbury, MN 55125

Date

RE: Consumer ID # (your consumer ID # here)

Dear Collections and Consumer Relations Dept.:

I have recently been informed that there is negative information reported by (name of bank) in the file ChexSystems maintains under my Social Security number. Upon ordering a copy of the report, I see an entry from this bank listing a “(condition such as NSF)” in (month/year).

I am unaware of ever having a “(same as condition above)” from this bank.

Please validate this information with (name of bank) and provide me with copies of any documentation associated with this “(same condition as above)” bearing my signature. In the absence of any such documentation bearing my signature, I ask that this information be immediately deleted from the file you maintain under my Social Security number.

Please note that you have 30 days to complete this investigation, as per the Fair Credit Reporting Act, and I am keeping careful record of your actions, in the event that this matter needs to be escalated into a small claims court action against you.

My contact information is as follows:

Your Name (printed or typed, not signed)
SSN
Address

Cc: (insert lawyer’s name here if you have one – or you could potentially just make one up), Esquire

LETTER # 2

Send if you receive a letter back from Chexsystems within 30 days, saying your account was verified as “legitimate” by ChexSystems.

Your Name
Your Address

ChexSystems Consumer Relations
7805 Hudson Road
Suite 100
Woodbury, MN 55125

Date

RE: Consumer ID # (your consumer ID # here)

Dear Collections and Consumer Relations Dept.:

This letter is in response to your recent claim that (Name of Bank) has verified that I have an unpaid debt with them. Yet again, you have failed to provide me with a copy of any viable evidence submitted by (Name of Bank).

Be advised that the description of the procedure used to determine the accuracy and completeness of the information is hereby requested, to be provided within fifteen (15) days of the completion of your re-investigation.

Additionally, please provide the name, address, and telephone number of each person contacted at (Name of Bank) regarding this alleged account. I am formally requesting a copy of any documents provided by (Name of Bank), bearing my signature, showing that I have a legally binding contractual obligation to pay them.

A bank employee looking at their computer screen, seeing my name listed in their database is NOT verification or validation of any alleged debt.

Be aware that I am making a final goodwill attempt to have you clear up this matter. The listed item is entirely inaccurate and incomplete, and represents a very serious error in your reporting.

Failure to comply with federal regulations by credit reporting agencies are investigated by the Federal Trade Commission (see 15 USC 41, et seq.). I am maintaining a careful record of my communications with you for the purpose of filing a complaint with the FTC and the state of Texas Attorney General’s office, should you continue in your non-compliance. I further remind you that, as in Wenger v. Trans Union Corp., No. 95-6445 (C.D.Cal. Nov. 14, 1995), you may be liable for your willful non-compliance.

Failure on your behalf to provide a copy of any alleged contract or other instrument bearing my signature will result in a small claims action against your company. I will be seeking $5,000 in damages for the following:

1.) Defamation

2.) Negligent Enablement of Identity Fraud

3.) Violation of the Fair Credit Reporting Act

You will be required to appear in a court venue local to me, in order to formally defend yourself.

My contact information is as follows:

Your Name (printed or typed, not signed)
SSN
Address
Cc: (insert lawyer’s name here), Esquire

LETTER # 3

Send if ChexSystems fails to respond to letter # 1 within 30 Days – instead of sending them letter #2.

Your Name
Your Address

ChexSystems Consumer Relations
7805 Hudson Road
Suite 100
Woodbury, MN 55125

Date

RE: Consumer ID # (your consumer ID # here)

Dear Collections and Consumer Relations Dept.:

As I have not heard back from you in over 30 days regarding my notice of dispute dated (date your letter was sent), I must presume that no proof in fact exists.

You have thirty (30) days from receipt of this notice to respond. Your failure to respond, in writing, hand signed, and in a timely manner, will work as a waiver to any and all of your claims in this matter, and will entitle me to presume that you are reporting my name and social security number in error, and that this matter is permanently closed.

Your continued silence is unacceptable. You must either provide the proof, or correct the record to remove the invalid entry from my ChexSystems file. You are currently in violation of the Fair Credit Reporting Act.

Failure to respond within 30 days of receipt of this certified letter will result in a small claims action against your company. I will be seeking $5,000 in damages for:

1.) Defamation

2.) Negligent Enablement of Identity Fraud

3.) Violation of the Fair Credit Reporting Act

For the purposes of 15 USC 1692 et seq., this Notice has the same effect as a dispute to the validity of the alleged debt and a dispute to the validity of your claims. This Notice is an attempt to correct your records, and any information received from you will be collected as evidence, should any further action be necessary. This is a request for information only, and is not a statement, election, or waiver of status.

My contact information is as follows:

Your Name (printed or typed, not signed)
SSN
Address
Cc: (insert lawyer’s name here), Esquire

LETTER # 4

Send to the bank that reported you to ChexSystems if you have received a reply to letter # 1 verifying the debt, or if you have not heard back from ChexSystems.

Date

Your Name and Address

Name and Address of original bank

Re: Acct # 000-000-000-000

To Whom It May Concern:

This letter is regarding account # (insert # here), which you claim (insert condition here, such as “I owe $200.00″). This is a formal notice that your claim is disputed.

I am requesting validation, made pursuant to the Fair Debt Collection Practices Act. Please note that I am requesting “validation”; that is competent evidence bearing my signature, showing that I have (or ever had) some contractual obligation to pay you.

Please also be aware that any negative mark found on my credit reports (including ChexSystems credit reports) from your company or any company that you represent for a debt that I don’t owe is a violation of the Fair Credit Reporting Act; therefore if you cannot validate the debt, you must request that all credit reporting agencies delete the entry.

Pending the outcome of my investigation of any evidence that you submit, you are instructed to take no action that could be detrimental to any of my credit reports.

Failure to respond within 30 days of receipt of this certified letter will result in small claims legal action against your company. I will be seeking a minimum of $5,000 in damages for:

1) Defamation

2) Negligent Enablement of Identity Fraud

3) Violation of the Fair Credit Reporting Act

You will be required to appear in a court venue local to me, in order to formally defend yourself.

For the purposes of 15 USC 1692 et seq., this Notice has the same effect as a dispute to the validity of the alleged debt and a dispute to the validity of your claims. This Notice is an attempt to correct your records, and any information received from you will be collected as evidence should any further action be necessary. This is a request for information only, and is not a statement, election, or waiver of status.

My contact information is as follows:

Your Name (printed or typed, not signed)
SSN
Address
Cc: (insert lawyer’s name here), Esquire

Additional Info

It is your legal right to dispute any item on your credit report, for any reason. If documented proof that discredits your dispute isn’t provided within 30 days, it MUST be removed by law. This is why it is so important to send the dispute form via certified mail. Not only to insure its delivery, but to have documented time of when it was sent.

The above letters should permanently remove your listing with ChexSystems, but in unique cases may only remove your name for a period of a few days. Our advice is as soon as ChexSystems sends a letter to you saying that you have been removed, GO AND OPEN A FEW CHECKING ACCOUNTS IMMEDIATELY. This is because the bank may verify your negative information a little after the required 30 day period. If this happens, your information will be deleted after 30 days, then reinserted a few days later.

Working Directly with the Bank that Reported You

After you have sent letter # 4 to the bank that reported you to Chexsystems, within 30 days, they must send you proof that you violated some sort of contract with them by maintaining a negative balance for too long, or writing a bad check, etc. Proof must be in the form of something tangible, which is indisputable. An example would be them providing a copy of original contract you signed when you opened the bank account, with your signature.

*IMPORTANT* – Even if the bank does verify with indisputable evidence that you did fail to bring your account to a positive standing, or that you owe them money, they are STILL required by law to report to ChexSystems that you have formally disputed the information in your ChexSystems file from this bank. THEY NEVER DO. – And this my friend, is your guaranteed way out of Chexsystems.

What you will need to do is request your Chexsystems report again, from exactly 30 days after your letter is received by the bank. (and you will know the exact day they received it because you sent it certified mail).

Now look at your updated Chexsystems report and see if the bank has added a note on your report stating “Consumer disputes as per FCRA”. If they didn’t, you have them in a violation of the Fair Credit Reporting Act, Section 623. Now they have broken the law and its game over for them.

Remember, you aren’t doing anything illegal here. You are simply using the laws to your advantage. Whether or not the debt is truly yours is irrevelant. The banks and Chexsystems are required by law to report clearly and accurately, and in a timely fashion. However, they are overwhlemed with so many complaints, calls, letters, etc. that they cannot keep up the time frames required by federal law.

Next, send a simple letter to the bank, letting them know you intend to sue them within 30 days unless they delete all record of the entire debt, and remove you from Chexsystems, in exchange for you dropping the suit. If they do not respond to your liking, or do not respond at all, simply take them to Small Claims court, which only costs around $20. When they are served notice of a court date, they will settle 99% of the time over the phone because they do not have the time or money to waste by sending a lawyer to appear in court on their behalf for one measly customer and a debt of a few hundred dollars.

Always proof read your letters. It would be a little embarrassing to send a letter that still had some of our notes on it, not to mention the fact that they probably wouldn’t take you seriously.

If they do miraculously decide to appear in court, you will win anyway, because you are not saying you don’t owe the debt, you are suing them for violating the Fair Credit Reporting Act, which they in fact did. – I know this to be a fact because I did go to court and WIN this way!

Summary

You should know that ChexSystems is a consumer reporting agency, just like Equifax, Experian, and Trans Union. Therefore, you are protected by the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA).

Section 623(a)(3) of the Fair Credit Reporting Act

§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]

(a) (3) Duty to provide notice of dispute. If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

Section 807(8) of the Fair Debt Collection Practices Act

§ 807. False or misleading representations [15 USC 1962e]

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

Typically, you can sue for up to $1,000 per violation of the above laws.

Taking Chexsystems to Small Claims Court

If you’ve taken all of the above steps, with unfavorable results, you still have one, very powerful final resort. The final method is to file small claims suits against ChexSystems. Don’t worry! It is much easier than it sounds. Most of the time they won’t even put up a fight! They will settle. They will not show up in court. Not only will they delete your record, sometimes they will actually pay you a cash settlement.

After all, they benefit nothing by reporting your negative information. When they are threatened financially, they usually settle for removal in exchange for you dropping the suit. And remember, filing a small claims suit only costs around $30.

Don’t forget, if the original bank failed to validate and show proof of a debt to YOU, how could ChexSystems possibly be verifying these debts!? They can’t. This is because they verify the debts by contacting a $7 per hour clerk at the bank who says, “Yes, I see the debt listed on our computer.” They consider that “verification”. But the courts do NOT consider that proper verification. You will have many little known case laws to back you up. This is the stuff the they don’t want anyone to know! ChexSystems is a consumer reporting agency just like Equifax, TransUnion, and Experian. They all fall under the same federal laws.

What you can file suit against them for:

“negligent and willful failure to reinvestigate the disputed entries in violation of sections 611(a), 616, and 617 of the FCRA, 15 U.S.C. §§ 1681i(a), 1681n, 1681o”

A copy of a similar lawsuit appeal where TransUnion was found liable for their lackluster verification procedures can be found on Google.com

In the search box enter something in reference to: “Cushman v. Trans Union Corp., 920 F. Supp. 80 (E.D. Pa. 1996) or Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997)”

Send a copy of the above case to the ChexSystems legal department, and we’ll bet that they will suddenly want to settle with you! After all, why would they want to tangle with a savvy consumer who knows the law, all over a debt of a measly few hundred dollars?

Some other cases you may want to reference are:

Richardson v. Fleet Bank of Massachusetts – the court held that the company failed to follow reasonable procedures by relying on creditors for accurate credit information because the company had reason to know of the dispute between the consumer and the company.

Bryant v. TRW – the Defendant consumer reporting agency unsuccessfully argued that, under §607(b) of the FCRA, 15 U.S.C. §1681 et seq., it was not liable as a matter of law, for reports it issued in good faith, and as a result of inaccurate information provided to it by Plaintiff’s creditors. The court held that Defendant was not free from liability when the credit reports at issue was not accurate. Once inaccuracy was determined, defendant’s agency procedures were determined to be not reasonable to ensure maximum possible accuracy, pursuant to §§607(b). In Bryant v. TRW, Inc., 487 F.Supp. 1234, 1242-43 (E.D.Mich.1980), the district court awarded a consumer $8,000 for anguish resulting from denials of a mortgage due to inaccurate credit reports. The Sixth Circuit affirmed. 689 F.2d 72 (6th Cir.1982).

Stevenson v. TRW Inc., 987 F.2d 288, 293 (5th Cir. 1993). – “Allowing inaccurate information back onto a credit report after deleting it because it is inaccurate is negligent.”

Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir.1983). – Actual damages include humiliation or mental distress, even if the consumer has suffered no out-of-pocket losses.

In Pinner, 805 F.2d at 1265, the consumer was awarded $ 25,000 for mental distress because of the humiliation and embarrassment resulting from three credit denials and from lengthy dealings with the credit bureau. The court did, however, order a remittitur from the original jury award of $100,000 mental distress damages. Another consumer received $10,000 because of humiliation and embarrassment suffered from three denials of credit and from the fact that the credit bureau took several months to correct the credit report’s inaccuracies. Thompson v. San Antonio Retail Merchants Ass’n, 682 F.2d 509, 513-14 (5th Cir.1982).

In Collins v. Retail Credit Co., 410 F.Supp. 924, 936 (E.D.Mich.1976), the court awarded a consumer $21,750 for embarrassment and humiliation.

In Morris v. Credit Bureau of Cincinnati, Inc., 563 F.Supp. 962, 969 (S.D.Ohio 1983), the consumer was awarded $10,000 for anguish and embarrassment even though, after he was denied credit, he explained the inaccuracies on his credit report and subsequently obtained credit.

In Millstone v. O’Hanlon Reports, Inc., 528 F.2d 829, 834-35 (8th Cir.1976), the Eighth Circuit upheld an award of $2,500 for mental anguish after an insurer cancelled the consumer’s policy because of an inaccurate credit report.

Ryan v. Trans Union Corp., Case No. 99 C 216, 2001 – “The court held that defendants were entitled to a partial award of attorney’s fees from plaintiff under the FCRA to the extent that plaintiff filed oppositions to defendants’ summary judgment motions knowing that he no longer had a valid claim.”

Non Chexsystems Banks

If all of the above seems like a lot of work, then another option is simplay opening an account at a bank that doesn’t use Chexsystems. You can find out more about non-chexsystems banks here.

Comments? Questions?

You can also ask your own questions, please contact us using the form here.