How to deal with ChexSystems and TeleCheck.

Have you ever gone to the bank to open an account only to be told that they cannot help you because your name is listed in ChexSystems or TeleCheck?  If you answered yes, then you probably already know that you will likely be denied an account on this basis.

ChexSystems and TeleCheck are account verification companies that are used by banks and credit unions to check your banking history when you attempt to open a bank account.  They are basically consumer reporting agencies designed to check to see if you have mishandled bank accounts in the past, such as overdrawing accounts, bouncing checks or having an account closed by the bank for an existing debt.  If you are listed with one of these companies, you will most likely be denied the ability to open a bank account.

A common misconception is that filing for Chapter 7 bankruptcy protection will remove your name from ChexSystems or TeleCheck.  While the bankruptcy can eliminate the debt owed for an overdrawn account or NSF check, it does not ensure that the negative mark will be removed from the reporting agencies records.  To open an account with the bank where the issue originated, you may still have to pay back the debt owed, even though you are no longer legally responsible for the debt.  Even this is not a guarantee that the account will remain open.

This does not mean that companies like ChexSystems and TeleCheck are impervious to actions by consumers.  As a consumer reporting agency, these companies are governed and restricted by the Fair Credit Reporting Act (FCRA) and the 2003 amendment to the FCRA, known as the Fair and Accurate Credit Transaction Act (FACTA).  They are required to report accurately and consumers are entitled to one free copy of their report each year.  Inaccuracies can be disputed and, if they are not addressed in a proper manner, legal action can be taken against these companies.

If you have an issue with ChexSystems, TeleCheck or another account verification company and they are not resolving it, you may need the representation of an experienced Chicago consumer rights attorney.  The attorneys at Ledford & Wu have years of experience and are happy to offer you a free consultation to discuss your issue and potential solutions.

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