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St Paul, MN-based Deluxe Corporation, started in 1915 and now
the world's largest blank-check printer, provides a service to banks called
This database keeps track of negative information regarding
the handing of checking and savings accounts, particularly accounts that were
closed due to excessive NSF (non-sufficient funds) activity (i.e. bounced
checks), ATM overdrafts, or other types of misbehavior. Most banks (Deluxe
claims over 80%) will contact ChexSystems when a prospective customer applies
for a new checking account. If you walk into a branch to apply, the person
taking your application will call ChexSystems on the telephone right then
and there. If you are listed for past closed accounts, then your new account
application will nearly always be denied.
There are nineteen million old accounts listed as "Closed
For Cause" in the database. Some people do not even know that they have
been listed until they attempt to open a new account and are rejected.
ChexSystems also lists recent inquiries resulting from account
applications with banks. A bank may become suspicious if they find that you
have recently applied for accounts at several other banks over a short period
of time. The inquiries include details of exactly what name, address, SSN,
driver's license number, etc. were given on the previous applications.
ChexSystems is covered by the Fair Credit Reporting Act as a "consumer
reporting agency," so if you are denied any sort of account based
on information provided by ChexSystems, you are legally entitled to receive
a copy of their file on you. Your request must be to ChexSystems directly,
not to the bank you applied with.
While the major credit bureaus keep negative items on file
for seven years, ChexSystems keeps items for five years from the date of insertion.
Deluxe also owns the Shared Check Authorization Network (S.C.A.N.),
used to verify checks at over 77,000 retail locations. Nearly three billion
transactions worth over $175 billion are processed by S.C.A.N. every year.
S.C.A.N. will consult the Deluxe database to determine if the consumer has
written any unpaid bad checks at other retailers recently, if that specific
checking account has already been closed, or if the consumer has a general
negative check-writing history. Any of these will result in the check being
rejected. The S.C.A.N. system may even become suspicious of checks are presented
out-of-sequence (e.g. this is check #500, while the last known check written
on this account was #450.) Checks bounced at S.C.A.N.-using retailers may
result in being rejected for a new bank account.
Deluxe's main competitor in the areas of new-account and retail verification
is a company called Telecheck.
Deluxe's collection agency, National Revenue Corporation
(NCR) pursues debts for 30,000 creditors.
Deluxe Data Resources sells detailed consumer demographic
information on 100 million households.
The printing division, Deluxe Financial Services, Inc., holds
over 117 million check-ordering histories.
More recently, Deluxe has developed a much more sophisticated and detailed
reporting system called the Debit Bureau, which claims a billion records,
and consolidates data from all of Deluxe's other divisions. the Debit
Bureau was created with help from database company Acxiom
Corporation, and risk-scoring specialist Fair, Isaac.
It is always best to deal with consumer reporting agencies
12005 Ford Road
Dallas, TX 75234-7253
SCAN Shared Check Authorization Network
Electronic Transaction Corp.
19803 North Creek Pkwy
Bothell, WA 98011
ChexSystems does not have a history of being consumer-friendly,
but in April 1999, they finally put up a consumer-oriented Web site (which,
perhaps tellingly, they don't seem to have promoted to the search engines):
"Consumer Debit Resource" Site
For more background:
Business Checks And Forms
For a company that is so suspicious of everyone else, Deluxe
has itself done something rather suspicious. Their business checks
and forms site, Delforms,
contains a link to Deluxe-owned, Colorado Springs, CO-based Checks
Unlimited, (formerly known as Current Checks) and markets
blank checks directly to consumers via mail-order, rather than
through banks, as the main Deluxe printing operation does. Also,
there is a Current
Checks catalog site. But the sites do not mention its
Deluxe connection anywhere. Perhaps they realize that some consumers
may be specifically looking for an alternative to Deluxe (possibly
as a result of their database activities), and are attempting
to give the impression of a separate company(?) Order information
from the Current Checks division will certainly end up in the
Deluxe Debit Bureau database.
Possible Non-ChexSystems Banks
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