Consumers writing checks are subject to Telecheck: No matter what!

I’m always somewhat bewildered by the complaints I get on this site about Telecheck. First, we are in no way affiliated with Telecheck. Those of you who think this site somehow denied your check are mistaken. We do not approve or deny your checks written to merchants or anyone else for that matter.

Because many consumers don’t know what is Telecheck, I have written several articles over the years about Telecheck to inform consumers. While I don’t mind publishing your complaints about Telecheck, please know we are not Telecheck. Telecheck’s website is “Firstdata.com.”

If you still don’t know what is Telecheck, here you go

Telecheck is a consumer reporting agency that helps merchants reduce fraud and identity theft related losses. Telecheck does this by electronically verifying checks for merchants. TeleCheck builds and maintains a huge database of information aggregated from bank accounts, checks, merchant transactions and debt records.

When a consumer writes a check an analysis is performed on that check looking for check writing transactions, unpaid debt and identity fraud, among other things. TeleCheck uses the information reviewed in these processes to communicate risk to merchants.

Major problems with Telecheck

While you can’t blame merchants for using a system to protect themselves from fraud and possible loss of profits, honest customers too often get denied check writing privileges for no good reason. Telecheck can incorrectly label good check writers as a risk.

• The dreaded Telecheck Code 3 tells the merchant that the level of risk is significant. TeleCheck does not state whether the check is “good” or whether the check writer’s bank account has sufficient funds. It just flags the transaction.
• Your check may be declined if Telecheck has little check writing history on you in their databases.
• How long you’ve been writing good checks at merchants, retailers or anywhere else is irrelevant.
• Never having written a bad check is irrelevant to Telecheck.
• Merchants that always accept your check but now use Telecheck may start denying your check.
• Your check can be denied despite having sufficient funds in the bank.
• Telecheck Code 3 is the one that most consumers get tripped-up on. But Telecheck does a poor job in explaining to consumers why they were denied check writing privileges for Telecheck Code 3.
• When you call customer service to inquire why your check is declined be prepared NOT to get a reasonable answer; or, an answer at all.
• Telecheck Code 3 decline can include anything from a consumer’s check writing history, check writing activity, dollar amount to Telecheck’s internal limits for that particular merchant.
• Telecheck representatives more than likely CANNOT tell you why your check was denied.
• If your check is denied you can try your luck by calling Telecheck Customer Service at 800-366-2425.
• Never seen or new account numbers can cause Telecheck to deny your check.
• No previous history of shopping at a particular merchant can be a reason for denial because it doesn’t fit your normal shopping pattern.
• Telecheck can be overridden by the merchant. A store manager can make the decision to accept your check despite a denial by Telecheck.
• Telecheck is a specialty Consumer Reporting Agency that MUST follow the Fair Credit Reporting Act. This means you are entitled to a free annual report, but only through USPS regular mail.

• Errors or inaccurate information in your Telecheck Report can be disputed. Telecheck has 30-days to verify the information as accurate or delete it.
• Complaints against Telecheck can be submitted with the Consumer Financial Protection Bureau at consumerfinance.gov and the Federal Trade Commission.
• In 2015 Telecheck settled a class action lawsuit regarding failure to properly investigate consumer disputes.

You can find the complaints we receive on this site about Telecheck here. Some of you may be able to relate to the frustration and anger consumers have when unfairly denied check writing privileges.