Return to the Home Page

ChexSystems Account Abuse: Everything You Need To Know

ChexSystems account abuse is a category ChexSystems uses to report negative checking account activity.

ChexSystems is one of several nationwide specialty consumer-reporting agencies (NSCRA) that reports consumers’ checking account behavior. Unfortunately, ChexSystems account abuse is one of two major categories, ChexSystems over-uses to categorize negative checking account activity.

What is ChexSystems Account Abuse?

ChexSystems account abuse occurs when a bank customer fails to comply with terms in their deposit account agreement. Here are several examples of ChexSystems account abuse:

  • Unpaid overdrafts
  • Unpaid fees
  • Any banking account closures
  • Debit or ATM card abuse
  • ATM abuse
  • Excessive Non-Sufficient Funds (NSF) activity
  • Checking account regularly being overdrawn
  • Length of consecutive days overdrawn
  • Checks you deposit that are returned

While ChexSystems account abuse sounds awful, that notation is in no way as damaging as a ChexSystems suspected fraud notation.

Unless you choose from banks with no ChexSystems it will be difficult to open a new checking account with a “suspected fraud” notation on your ChexSystems report.

How to remove account abuse from ChexSystems?

One of the most common ways to remove ChexSystems account abuse notations is through the dispute process if your ChexSystems report contains errors or is inaccurate.

Here are more options to remove account abuse from ChexSystems:

  • Dispute directly with the bank or credit union that reported you. Under the Fair Credit Reporting Act (FCRA), banks must to conduct and complete an investigation within 30 days once they receive your dispute. The bank is required to provide you with a notice detailing the results of its investigation. If the bank fails to respond within the 30-day time period, they must remove the account abuse notation.
  • If the notation is accurate consider paying what is owed and requesting the bank remove the record from your ChexSystems report.
  • Contact the banking regulator in your state. They typically have online complaint forms to help consumers resolve issues. Find your state banking regulator here.
  • Federal financial institution regulators like the Office of the Comptroller of the Currency manage complaints about commercial banks having the word “Federal” or “National” or using the title “N.A.” (National Association) in their title.
  • The National Credit Union Administration manages complaints about federally-regulated credit unions
  • It’s likely that your complaint is governed by the Consumer Financial Protection Bureau’s regulatory authority also.
  • If efforts to remove ChexSystems notations, you may have to wait it out. ChexSystems will remove the account notation reaches 5 years from the report date

How to avoid getting flagged for ChexSystems account abuse?

It’s important to regularly monitor your checking account. Balancing debits and ensuring you have enough funds to cover transactions will often help avoid getting your account flagged.

Here are a few more tips to maintain a checking account in good standing:

Communicate with your bank. Work with the bank when overdrafts or return items occur.
Practice relationship banking. If you have a local bank branch, get to know the branch managers. They often the authority and latitude to override the bank’s policies.
Overdraft protection for a fee. Overdraft protection is an optional service that banks offer in order to help protect customers from having their checks, ATM transactions, or debit-card purchases rejected due to insufficient funds. This service typically comes with a fee.
Free overdraft protection. Chime offers a checking account that will spot you up to $200¹ on debit card purchases and cash withdrawals with no overdraft fees. SoFi Bank also allows customers to overdraft their checking accounts up to $50 with no charge.

1 Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month and Visa debit card activation. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See terms and conditions.


Explore More

Send Us A Message

Get In Touch

6080 Center Dr, 6th Fl
Los Angeles, CA 90045

© 2023 All Rights Reserved.