If you've ever had trouble opening a bank account you are probably familiar with ChexSystems. But have you heard of EWS? Early Warning Services (EWS) makes it possible for banks to exchange information between organizations in order to prevent and combat fraud.
While ChexSystems maintains a huge database on how bank customers manage their accounts, EWS primarily tracks fraudulent activities such as check fraud, bank fraud, forgery, check-kiting, check alteration and counterfeiting.
Early Warning Services was formed to combat fraud in the financial industry. EWS is co-owned by Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo. Here is how EWS works:
Banks subscribe to use EWS
Banks and Credit Unions subscribe to Early Warning Services. Information is shared with the financial institution about a potential customer’s risk. Below are some activities customers are screened for:
- Prior history of fraud
- Account abuse
- Check Alterations
- Check Kiting
- Identity verification
- Account owner authentication
EWS screens potential bank and credit union customers in a branch and online. Additonally, teller window, phone and ATM transactions are sometimes screened. Related: Find Second Chance Banks
What EWS considers as risk transactions
Using your bank account for any kind of fraud is a major red flag. But the problem with a fraud notation is that many customers unintentionally commit fraud. Let’s say a family member, employer, or even business gives you a check. You deposit that check. If the check bounces, your bank’s risk department may report fraud to Early Warning Systems. Even if you cover the check deposit immediately, the bank can still report fraud to EWS. Customer risks could include fraud committed at another financial institution also.
How Early Warning Services impacts consumers
Consumers may be prevented from opening a bank account, in-branch or online due to a report in Early Warning Services. What’s worse is a bank may open an account for you only to close it a week or two later after their Loss Prevention Dept. screens your new account. Many times consumers are unaware of any report to EWS and only find out when they are attempting to open a bank account or write a check.
EWS can even prevent you from writing a check. Telecheck may not be the reason your check was denied. Consumers have complained being reported to Early Warning Services for minuscule amounts. Some consumers have paid those small amounts and are still unable to open a bank account or write a check.
Bank that don't use EWS to open new accounts
Consumer laws that protect you
Early Warning Services is a consumer reporting agency, just like ChexSystems and Telecheck. You are entitled to a free consumer report from Early Warning Services under the Fact Act every 12 months. You can also order your consumer report any time but it may be subject to a fee. Consumers can also dispute the information in the EWS report just like you can dispute items in your credit report or items in ChexSystems.
The Fair Credit Reporting Act requires only accurate and complete information be reported by any consumer reporting agency and that includes EWS. If you find information in your consumer report that you believe is inaccurate or incomplete, you have the legal right to dispute the report’s content with Early Warning Services and the bank that reported the information to EWS. Under the FCRA, banks must conduct a reasonable investigation of your dispute.
The bank must correct the error and notify EWS to remove the inaccurate information. EWS information can remain up to 7 years on your records although EWS typically removes information from your files after 5 years.
EWS settles class-action lawsuit
March 2020, Early Warning Services agreed to pay nearly $4 million for violating the Fair Credit Reporting Act in how they respond to consumer file requests. According to the class-action, Early Warning Services did not comply with a consumer's request for her EWS file. In violation of the FCRA, EWS provided an inaccurate consumer file — allegedly removing the term “fraud” from the file disclosures.
Plaintiff Shabani Stewart filed her class-action lawsuit in March 2018, claiming the company violated the FCRA by failing to provide accurate disclosures to consumers when they have fraud alerts on their account. Stewart alleges she was repeatedly denied a bank account at several banks. The banks allegedly informed her there were fraud notations in her EWS file.
But, after she ordered her EWS file there was no mention of fraud. Allegedly EWS failed to provide her with the EWS file they were providing to the banks where she applied for a checking account. EWS violated the FCRA by failing to provide accurate disclosures to consumers when they have fraud alerts on their accounts.
“Plaintiff was misled by EWS’s disclosure. Plaintiff specifically wanted to know if EWS had a record of her committing ‘fraud,’ in connection with her Bank of America account,” the Early Warning Services class-action lawsuit claimed. “EWS had such a record, but failed to disclose it.” Stewart’s true EWS file allegedly contained a report from Bank of America for “checking account fraud.”
Stewart maintains she never committed fraud; however, due to the false disclosure from Early Warning Services, she was unable to dispute this record.
How to order your EWS report
Early Warning Services does not make it simple to order your EWS Report. You must first download and fill-out the Early Warning Consumer Identification and Certification Form and return it with a copy of your government-issued identification. Submit the completed form along with your identification through ONE of the following methods:
1. Electronically through the EWS communication portal
Go to: consumerservices.earlywarning.com. When prompted for the Early Warning email address, enter firstname.lastname@example.org. Follow the instructions on the screen to create your User ID and password, and to upload the documents to be transmitted to Early Warning. If you need technical assistance call 1.877.639.4457.
2. U.S. Mail
Attn: Consumer Services Department
16552 N. 90th Street
Scottsdale, AZ 85260
Alternative method to order EWS Report
Contact Early Warning Services at their Consumer Call Center
1-800-745-1560 for your consumer report.