St Paul, MN-based Deluxe Corporation, started in
1915 and now the world's largest blank-check printer, provides a
service to banks called ChexSystems.
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
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
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 is writing:
12005 Ford Road
Dallas, TX 75234-7253
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):
ChexSystems "Consumer Debit Resource" Site
For more background:
Deluxe 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
Credit Bureaus Menu