What is ChexSystems?

You may find yourself unable to open a checking account because of ChexSystems. Most banks have hired ChexSystems Inc. to let them know of "risky consumers" who have in the past "neglected" a checking account at a banking institution.

How it works:
U.S. banks and credit unions report incidents to ChexSystems to protect themselves and other banks in the future. You get reported to ChexSystems if your account is closed for "cause." What is "for cause?" Banks differ greatly between them as to what valid reasons are for closing an account. Here are some examples:

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The bank was unable to collect for an overdraft, ATM transaction, or automatic payment which they honored on insufficient funds.(Regardless of amount, and often without waiting more than a few days!)

Multiple overdrafts.
Savings account, debit card or ATM abuse.
Fraud.
Providing false information in opening account.

Each incident stays on your record with ChexSystems for FIVE full years from the date the incident was reported.

Getting an incident reported to ChexSystems can be the Kiss Of Death for your financial future. Most banks now say: "Our bank policy is that we will not open a checking account for you if you have one or more incidents reported to ChexSystems."

ChexSystems is database tool used by many financial institutions in the United States as a protection method against account fraud. Banks and credit unions can access the database in request for information about their customers in order to assess the risk of opening new accounts. In turn, those banks feed the same fraudulent customer information back to the ChexSystems database. In addition, ChexSystems also offers collection services for unpaid dues.