Chex Systems is a private database that tracks consumers’ behavior with checking accounts. The company that owns the database, Fidelity National Information Services (no relations to Fidelity Investments), is, among other things, a credit reporting agency. Therefore, customers whose activities have been tracked in Chex Systems have some rights, like customers whose credit is reported by banks to Experian, Equifax, and TransUnion.
Banks interact with Chex Systems in two ways. First, for anyone who already has a checking account, overdrafts, bounced checks, and other activities a bank might consider to be “bad behavior” or suspect of fraud, are reported to the database. That can range from small mistakes that aren’t resolved in a timely manner, regardless of the reason those mistakes occurred, to fraudulent activity, like deliberately writing checks with no intention to cover the funds. Banks willingly participate by reporting these problems to ChexSystems.
Banks also use ChexSystems as a background check. Over 100,000 bank branches in the United States check with ChexSystems before offering an account to a new customer. Any negative mark on a ChexSystems report is enough to deny a potential new customer. Although some banks have become more lenient with their policies, having any problems on the report can limit your ability to open a new checking account.
Banks should be able to look for ways to mitigate risk by offering accounts to those who won’t commit fraud, and using a central database is one way to achieve that goal. It’s likely that customers who have run into hard financial situations get caught in the system, as well, even though there’s little liability risk to the financial institutions they’d like to do business with.
Like with credit reports for borrowing money, low-income households are more likely to have negative marks on their Chex Systems reports, not because they don’t know how to manage money or are ignorant of financial literacy, but because with low-income, building savings is much more difficult, and bouncing back from minor problems might take more than the thirty days banks give before reporting overdrafts to Chex Systems. As a result, low-income families are less likely to qualify for checking accounts, and have to turn to fringe financial services like payday loans and check-cashing storefronts even if they’d prefer to use the mainstream banking system.
Because ChexSystems is a financial reporting agency, it falls under the same regulations as the three credit reporting agencies. One of the rights offered consumers is the ability to receive one free personal report from ChexSystems each year. You can order one free credit report each year from each of the three credit reporting bureaus, so I like to spread my three opportunities throughout the year.
Why you should check your ChexSystems report
It’s a good idea to be proactive. If you are ever denied a checking account because of your history as reported to ChexSystems, you will be able to receive your free report, but you don’t need to wait until then. Even if you don’t think you have any negative marks on your ChexSystems report, it’s a good idea to check the report to make sure there aren’t any mistakes on file.
Reviewing your Chex Systems report each year can help you catch unauthorized attempts to use your identity. If you see an account on your report you don’t recognize, someone may have used your information to open an account. The risk of this happening is low, so it shouldn’t be something that frightens consumers, but the possibility still exists and is worth the effort once a year to retrieve your report for free.
How to receive your free ChexSystems report
There is only one source for ordering the free checking report, a service that was mandated by the Fair and Accurate Credit Transaction Act (FACTA) and the Fair Credit Reporting Act (FCRA). Chex Systems has put in place a system to comply with these regulations. The website to remember is chexhelp.com. This is the only official website for ordering your free ChexSystems report. Other websites may charge fees. Chexhelp.com is the checking account equivalent of annualcreditreport.com, the only legitimate site for ordering your free credit reports each year.
Note that when you visit chexhelp.com, the website redirects you to a different web address. Consumerdebit.com is legitimate, it’s just easier to remember chexhelp.com than the other long URL.
If you don’t want to order your Chex Systems report online, there are several other options:
- Call 1-800-428-9623 to order by phone.
- Print and complete this order form, and mail it to the address included.
- Print and complete the same order form as above and fax the form to 602-659-2197.
I opted to order my account online via the chexhelp.com website. If you are ordering a ChexSystems report on behalf of someone else through your Power of Attorney, you must use the mail-in or fax-in form and include notarized proof of your legal standing.
Also, if you are ordering the report on behalf of someone under the age of 18, you’ll need to mail or fax the request with a significant amount of documentation, outlined on the website, including copies of the child’s birth certificate, Social Security card, the parent’s driver’s license, proof of address, and a document confirming legal guardianship if necessary.
Before ordering your ChexSystems report, you must agree to allow Chex Systems to store your personal identifying information as well as to other terms and conditions. After agreeing, ChexSystems will ask if you’ve been declined an account during the past 60 days. Either way, the system will allow you to continue to receive your Chex Systems report.
After confirming online that you are over the age of 18, you will see the full application. Chex Systems, when filing online, requires a Social Security number, but does not require users to enter a driver’s license number. Don’t forget to enter any previous address you’ve had if you haven’t lived at your current address for five years.
Once you submit your personal information, Chex Systems will check the database for your records. With your free credit reports from Experian, Equifax, and Transunion, you can receive your credit report immediately online. I was hoping the same would be possible with Chex Systems, but that is not the case. If you have a Chex Systems file, and if you have had a checking account, chances are you’ll be included in the database, the company will send your report via traditional mail within five days.
When you receive the report, review it carefully to ensure all of your personal information is correct. If there are accounts listed that you don’t recognize, contact ChexSystems and the banks immediately. If you see negative items that you want to dispute, begin that process quickly.
Dispute items on your Chex Systems report
If you disagree with an item or items included on your Chex Systems report, despite them immediately. Complete this request for reinvestigation form and fax it to 602-659-2197 or mail it to Chex Systems, Inc., 7805 Hudson Road, Suite 100, Woodbury, MN 55125.
If the reinvestigation does not result in the resolution you want, you can attach your own statement to your report for financial institutions to see (and most likely disregard) when they check your report. Complete this request for consumer statement form and fax or mail the completed form to the same location as above. Be careful when submitting a consumer statement. Chex Systems has a few rules and warnings about what may be included in your submission.
Because ChexSystems keeps personal records that can be used to deny consumers access to financial resources, all consumers should be able to see that stored information. Consumers should want to monitor this company that’s monitoring them. It only takes a few minutes and it costs nothing. When you check your credit reports each year, don’t forget to order your Chex Systems report as well.
Updated August 19, 2016 and originally published August 2, 2013.