ChexSystems

ChexSystems is a check verification service and consumer credit reporting agency; similar in ways, to Experian, Equifax and TransUnion; but unique in the fact that its main purpose is to provide information related to how a consumer has handled banking relationships (checking, savings, etc) rather than consumer or business credit relationships. ChexSystems is a registered service mark of Chex Systems, Inc, a wholly owned subsidiary of eFunds Corporation.

Common ChexSystems Uses

Many commercial banks and credit unions in the United States use ChexSystems as a step in approving the application for a consumer who wishes to open a checking or savings account. Commonly, the database kept by ChexSystems will show whether or not a consumer has had numerous overdrafts or an unsatisifed balance with another bank. The information in this database is often a primary factor in the approval or denial of an application for a checking account. In 1999, ChexSystems was successfully deemed a consumer reporting agency, and therefore, governed by the Fair Credit Reporting Act. Consumers are now able to retrieve a free annual report from ChexSystems and allowed to dispute transactions and demand proof of any negative information reported.

Criticism

ChexSystems has been criticized by many bank and credit union customers for unfair reporting. Many of these complaints are documented and reported on by various web sites and internet forums.

Legally Binding Contracts With Banks & Credit Unions

Banks and credit unions sign a contract with Chexsystems stating that they will turn down any client who is in their database for banking services. This contradicts the rejection letter that banks and credit unions hand consumers that says Chexsystems played no role in the decision making process of your being denied a bank account.

External links

• Chexsystems Corporate Website
• E-Funds, Chexsystems Parent Company
• ChexVictims.com - Victims of ChexSystems help forums