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
Eighty percent of all commercial banks and credit unions in the United States use ChexSystems as a step in the consumer checking or savings account application process[1]. A consumer's ChexSystems report will show any banking irregulities such as overdrafts or unsatisifed balances other banks have reported in the past five years. For the banks that use ChexSystems' services, a consumer must not have any negative information reported before a checking account application is approved. 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[2].
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. [3]
External links
- Chexsystems Corporate Website
- E-Funds, Chexsystems Parent Company
- ChexVictims.com - Victims of ChexSystems help forums
- ^ BankRate.com Basics tutorial
- ^ BankRate.com "Negative ChexSystems report nixes account"
- ^ ChexVictims.com "Your Story" Forums