People who write bad checks, overdraft their checking accounts or commit debit card abuse run the risk of being reported to ChexSystems, a consumer reporting agency. Having your name in ChexSystems makes it very difficult to open new checking accounts, even at credit unions. This is because most banks screen applications for new accounts through the agency.
For people who were reported to ChexSystems by error, it may be possible to have your record removed. Under the Fair Credit Reporting Act, consumer reporting agencies must list accurate information. ChexSystems is a consumer reporting agency, and must abide by this law.
How Do You Remove a ChexSystems Report?
There is debate on whether disputes should be sent to ChexSystems or to the bank responsible for the report. Disputes should be sent to the bank that reported you and ChexSystems.
- Step 1: Get your ChexSystems report: If you have been denied a bank account, you may want to see if you are listed in ChexSystems. Although ChexSystems is used by more than 80 percent of financial institutions, other banks or credit unions use Early Warning Services or TeleCheck, both of which are similar services. If you do not have a ChexSystems report, check the latter two businesses.
- Step 2: Gather documentation: Gather evidence that an error has been made. This can include any documents your bank has sent in writing, or bank statements affirming the information listed in ChexSystems is incorrect. Be sure to only use copies of these documents. Never use originals.
- Step 3: Write and send a dispute letter: Send ChexSystems a dispute letter along with copies of your documents. Be sure to explain why you believe the information is incorrect. Send the same letter and documentation to the bank that reported you to ChexSystems. Ask that any incorrect information be removed. Letters should be sent through certified mail and with a return receipt requested.
- Step 4: Wait 30 days: ChexSystems has 30 days to verify that its reporting is accurate. This is where the process becomes a bit tricky. They may respond by claiming the account is accurate or by removing the account. In some cases, they may not respond.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help people find solutions for managing difficult financial situations.