If you hold a checking account, chances are that you have heard of one or 2 systems that you never want your account to show up in. These are TeleCheck and ChexSystems. Both list information of individuals who have mismanaged their checking accounts.
Here we will look at TeleCheck, and explain why you don’t want to be in it, how it differs from ChexSystems, and how you can get your name removed. Moreover, there are a few banks that do not use the ChexSystems and TeleCheck.
According to TeleCheck Parent Company, First Data Corps, “TeleCheck is a means for businesses to minimize the risks related with accepting checks.” The process entails analyzing checking account transactions via debt verification, and measuring the risk to determine the probability that a check is good or bad.
TeleCheck runs a transaction database that includes data about check writers gathered from bank accounts, checks, transaction with other business, and debt records. Each time you give a paper check, it is run via an electronic swipe device that syncs with the TeleCheck Electronic Check Acceptance Service. And within minutes, TeleCheck can verify whether your account has any negative information, unpaid fees or a large number of overdraft amounts within a limited time frame. If your account has no negative elements, a receipt prints for clients to sign, and the check converts to electronic payment.
TeleCheck utilizes a proprietary risk analysis model to establish whether a check poses an acceptable level of risk or shows characteristics of fraud. If the risk proves to be beyond the threshold, TeleCheck will flag the check and then issue a code 3. However, the code does not tell the business anything apart from the fact that transacting with you poses a material level of risk. In simple terms, receiving a code 3 makes it hard for you to transact using your checking account.
ChexSystems is simply a database that allows banks to establish if a potential client is too much of a risk to accept as a client. It maintains records of any abuses that may have occurred with a previous account you held, and details the abuse so that the bank has a vivid idea of whether it should accept you or not.
TeleCheck is similar to ChexSystems since it keeps data on checking account abuse. However, the two differ since the only mismanagement that TeleCheck looks at is the incidences of an account owner writing a bad check, rather than other account abuse issues that could occur.
To clearly illustrate this difference between ChexSystems and TeleCheck, look at the following reason you could be reported to ChexSystems:
However, you only get reported to TeleCheck for one reason: writing bad checks.
If the business that reported you does not request to have your name removed, TeleCheck will remove it on its own after five years. Thanks to the FCRA (Fair Credit Reporting Act), only businesses and persons with legal permission have the right to view your account reports from TeleCheck. These business and individual includes:
It is important to note that just like with your credit reports, you also gain access to one free TeleCheck report each year.
The best way for anyone to avoid showing up on TeleCheck is to practice responsible banking behaviors, by making sure you have sufficient funds in your account before writing a check.
Contact the retailer or the financial institution that reported you.
Request the amount needed to clear you name. This is normally the amount of the EFT or check transaction, plus any additional fee the firm imposes.
Offer a lump-sum payment, or ask whether you can work out a repayment plan if you cannot afford a one time payment.
Make a payment by debit card, credit card, or money order. Most institutions won’t allow you to pay off TeleCheck debts using a check. The best way is to send mailed payments via certified mail. You should also request a return receipt to help you know when the payment reaches the company.
Contact the business after 5-10 days of receiving the payment to confirm it has removed your name from TeleCheck.
Review your TeleCheck report for possible inaccuracies. Law requires TeleCheck to remove all data it cannot verify.
Download the TeleCheck dispute form from .
Fill in the details required in the first section which includes your full names, social security number, date of birth, previous addresses, state and you drivers license number.
Detail the mistake you want to dispute in the following section. Although it may sound counterproductive, do not give the correct information to TeleCheck if it’s negative. If you do, they will remove the inaccurate information they had, replace it with the negative information you have given, and leave you in the system. The idea is to tell them about the inaccuracy. Period!
Send in the form via certified mail and ask for a return receipt. Your post office will send you a notice detailing the date TeleCheck systems received your form. This is the effective date from which the 30 days weight time clock starts to tick.
Lastly, after the 30 days are over, you should receive a notice of the investigation outcomes and the action taken. If TeleCheck can’t verify the information, it has to delete the entry, removing your name from TeleCheck systems. If it does ,then you need to contact the retailer or business that gave the information.
Similar steps are involved in getting out of Chexsystems, and you can find out more detail of how to get out of both Chexsystems and Telecheck by reading our free guide.
Rooting for ya,