Many consumers never heard of ChexSystems until a bank denies opening a checking or savings account. But ChexSystems is a consumer reporting agency just like Experian, Transunion and Equifax and this means you have the right to dispute any information in your ChexSystems Consumer Report.
ChexSystems is subject to the Fair Credit Reporting Act (FCRA) and must investigate any dispute you submit. ChexSystems has 30 days to investigate consumer disputes.
If the disputed item is not verified by the reporting bank, financial institution or credit union, they must delete the negative item from your ChexSystems Consumer Report.
Guide to Dispute ChexSystems Report
Step 1 – Request your ChexSystems Report
You will need your ChexSystems Report in order to initiate disputes. A free ChexSystems Report is available to consumers once every 12 months or if you have been declined a bank account during the past sixty days where ChexSystems was used in the decision process. The ChexSystems report contains a detailed summary of unpaid debts, excessive overdrafts, closed accounts, returned checks, bank inquiries and other relevant information.
You have three options to obtain your ChexSystems Report:
Download your ChexSystems Consumer Report instantly online at: ChexSystems.com.
Call ChexSystems at 800-428-9623. (This is an automated voice messaging system.)
Request by mail at ChexSystems.com then complete, print and mail the completed Consumer Request for Disclosure Form to:
Chex Systems, Inc.
Attn: Consumer Relations
PO Box 583399
Minneapolis, MN 55458
Step 2 -Review report for errors and inaccuracies
The FCRA Rules states consumer reporting agencies like ChexSystems must “accurately” report all negative information. Review your ChexSystems report for any inaccurate information you can use to get it deleted, for example:
- Date the bank reported you to ChexSystems might be inaccurate.
- Is the item being accurately reported to ChexSystems as NSF activity, account abuse, fraud, overdrafts or negative balance.
- Has the debt to the bank been paid but being reported as outstanding.
- Erroneous bank or credit union listed that you have never used.
- Bank employees sometimes make clerical errors like inaccurate status of incident or wrong description.
- Does the report contain outdated information. ChexSystems typically removes information after 5 years.
- Fraud could be due to identity theft or someone you wrote a check to changed the amount without your permission.
- Bank has mismatched your account information with another.
- Are you the primary account holder, if not, have you signed a signature card for this account.
- Is ChexSystems reporting personal information such as a name, address and Social Security number accurately.
Step 3 – Submit dispute to ChexSystems
Once identify the accounts and reasons to dispute you can submit it in several ways: The Dispute Section on the ChexSystems website allows you to choose how to submit your dispute:
- Online Form on the ChexSystems site that allows you to explain your dispute and even upload supporting documents, if you have them.
- Via mail by completing a dispute form and mailing to: Chex Systems, Inc. Attn: Consumer Relations PO Box 583399 Minneapolis, MN 55458
- Via fax at 602.659.2197
- By telephone at 800.428.9623
When disputing information in your ChexSystems it's probably better to write a dispute letter and send it via certified, return receipt U.S. mail that way you can create a paper trail in case you need it at some later date. If you choose not to use ChexSystems online form, here is a sample letter to get started.
Step 4 – ChexSystems Investigation
Once you submit your dispute, ChexSystems has 30 days to conduct an investigation. Here are the possible results:
Dispute is verified. Once your dispute request is received, ChexSystems must reach out to the bank to verify if the dispute is accurate. If the dispute is verified as accurate the account remains in your file for up to 5 years. But does not necessarily end at this point.
Request the method of verification. The FCRA gives you the right to know how the dispute was verified as accurate. Under the FCRA, ChexSystems is required to give you a method of verification within 15 days of your request. If ChexSystems cannot verify how they confirmed your dispute they must delete the account.
Dispute is not verified: If ChexSystems does not respond to your dispute within 30 days from their receipt they must delete the account. You can confirm when ChexSystems received the dispute by checking the green return receipt card you get from the post office. No response means they could not confirm the account as accurate and it must then be deleted from your ChexSystems file
Step 5 – Bank Investigation
If your ChexSystems dispute does not create the desired result, you have the right to dispute directly with the bank or credit union that reported you to ChexSystems. Furnishers of information to ChexSystems are required to accept disputes from consumers.
Send your dispute to the address for the bank or credit union found in your ChexSystems Consumer Report or you can call customer service for the bank that reported the information about you to find out where to send the dispute. Disputing directly with the banks may work in your favor in the case of older accounts.
Banks and credit unions are under the same dispute time-constraint to respond within 30-days or delete the negative item. ChexSystems and your financial institution must research the dispute within 30 days. The bank must report the results back to you within five days of completing its investigation.
Alternative ChexSystems removal methods
Bankruptcy can get you removed from ChexSystems
Consumers who have filed bankruptcy can request ChexSystems remove any records in ChexSystems. The bankruptcy does not have to be discharged in order to request removal from ChexSystems. Mail or fax ChexSystems a copy of your bankruptcy confirmation document and request they delete all negative items. Even if the negative items are fraud or account abuse, ChexSystems will remove them if you have filed bankruptcy.
Pay small balances in exchange for removal
There may be only one item on your ChexSystems report and if this is the case, consider paying the bank directly and follow these steps:
- Pay the amount in full.
- Get a proof of payment such as a receipt.
- Complete a ChexSystems dispute form or mail a dispute letter.
- Dispute on the factual basis of inaccurate reporting and no evidence of debt owed.
- Your goal is a deletion, not to have the item updated as “Paid.” Without a full deletion, a paid item is still considered negative
Take legal action
Hopefully you will not have to resort to legal action. However, if all efforts to successfully dispute an item have failed this may be the only course of action. Make sure you have created a good paper trail, with copies of all your letters along with the certified return receipts. Your legal action should include proof that you properly notified ChexSystems of the error and they did not correct make a correction.
Ask the bank for a goodwill removal
Another way to clear your ChexSystems report is to make a plea directly to the bank for removal. Many consumers have been successful by just asking. This method works best if you pay or offer to pay the amount in question when requesting removal.
Reasons banks report customers to ChexSystems
Customers reported to ChexSystems may wonder what are the reasons they were reported to ChexSystems in the first place.
Unfortunately, ChexSystems typically lumps negative information into two very broad categories—account abuse and suspected fraud.
But there's a huge problem with the “account abuse” and “fraud” categories used by banks and checking reporting companies. Neither the banks nor the ChexSystems have a standardized definition of account abuse or suspected fraud.
If a bank believes a customer has not complied with the account terms (e.g., unpaid overdrafts or unpaid fees) they could report the customer as an account abuser. The same exists for customers reported for suspected fraud. Unknowingly depositing a bad check can constitute check fraud.
Read about strategies to deal with fraud notations as it may take more effort to get removed.
It's important to have some idea why you were reported in order to formulate the proper argument for a dispute.
- Involuntary Closure – Account was closed the bank for unpaid negative balance from overdrafts and fees
- Suspected fraud related to a checking account like depositing uncollectible checks
- Joint account with someone who had unpaid overdrafts or is accused of account abuse
- Information from public records
Finally, ChexSystems records are removed after five years so if disputing ChexSystems does not work, wait it out. A negative ChexSystems report does not necessarily prohibit you from opening a new checking account or finding bank accounts for bad credit.
Second chance banks design checking accounts for people with a negative ChexSystems file or with bad credit. These types of checking accounts may have monthly fees but give customers an opportunity to upgrade to regular free accounts after 6 to 12 months of handling your account well.
More ChexSystems Resources
- Banks That Don’t Use ChexSystems – Take a look at our list of banks that do not use ChexSystems for a new checking account.
- EWS (Early Warning Services) – EWS is similar to ChexSystems and can prevent you from opening a checking account.
- Check your ChexSystems Report – Unsure what information exists in your ChexSystems report? Learn how to find out.
- ChexSystems Scores – Did you know that you have a ChexSystems score similar to a credit score? Find out how to get yours.
- Account Abuse – Find out why ChexSystems often reports customers for account abuse with no real explanation of what that notation means.
