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What is Telecheck: Everything You Need To Know

Ever had a check denied at the cash register? If so, you may be in the Telecheck database.

Ever had a check denied at the cash register? If so, you may be in the Telecheck database for a transaction you are unaware of.

Even if you have sufficient funds in the bank to cover the check, TeleCheck can deny your transaction.

You may not write checks often but TeleCheck can still deny you.

What is TeleCheck?

Telecheck is a consumer reporting agency that collects, maintains and reports consumer information related to check writing transactions and bank accounts.

Telecheck allows merchants to screen checks to make a decision to accept or decline your check. It guarantees to the merchant the full amount of a check approved through the TeleCheck system and offers merchants a warranty service option to handle the collection of returned checks from consumers.

Some banks that don’t use ChexSystems or Early Warning Services will utilize TeleCheck when deciding to open a new checking account. Financial institutions are vigorously working to minimize fraud and risk on all levels.

How TeleCheck Works

The information on your check is examined with TeleCheck’s database. TeleCheck utilizes predictive risk scoring model that allows merchants to determine whether or not they should accept your check.

What is known about the scoring model:

  • TeleCheck relies upon historic statistical models to establish the level of risk involved in check transactions.
  • The analysis determines the probability of the check being returned for insufficient funds and the possibility of check fraud.
  • TeleCheck accesses its databases and evaluates the customer’s check writing history.
  • Check approval is contingent upon the consumer having no adverse information in TeleCheck’s system along with the check writing patterns of the consumer.
  • If you are in TeleCheck’s system you may not be able to write checks in certain businesses.
  • The merchant makes a determination to accept or decline your check based on TeleCheck’s decision to guarantee the check for the merchant. If TeleCheck tells the merchant they will not guarantee the check, then the merchant makes the decision to decline the check based on TeleCheck’s “no guarantee”.
  • The merchant can always override TeleCheck’s decision to not guarantee the transaction but that would mean the merchant takes on the risk if the check returns insufficient funds or some type of fraud is involved.
  • Most merchants choose not to override TeleCheck’s decision because they don’t want to assume the risk.

TeleCheck Can Deny You Even With Sufficient Funds

TeleCheck can deny you even when you have enough money in the bank. TeleCheck does not have access to your bank account balance. A denial by TeleCheck does not mean you’ve done anything wrong. Your check may be declined simply because TeleCheck does not have sufficient information in its databases about you to complete the verification process.

Outstanding Debt Reported To TeleCheck

Another reason your check may be declined is that you have an outstanding debt in TeleCheck’s database. That database includes any merchant who uses TeleCheck, not just the particular merchant where you were declined. There are 8 main reasons TeleCheck denies check-writing privileges but Code 3 is a common denial reason.

Read “8 Reasons your check may have been denied by Telecheck” for more information about why Telecheck declines checks.

What Does TeleCheck Denial Code 3 Mean

Code 3 is a common denial reason when people attempt to write checks at the point of sale with merchants. 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.

  • 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 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.

Dispute Telecheck

Telecheck is considered a consumer reporting agency because they collect, store and sell consumer information. The Fair Credit Reporting Act (FCRA) governs consumer reporting agencies so you have the same remedies available to you as you would if disputing an item on your credit report. Read “How to Dispute Telecheck” for more information on how to challenge the information in your Telecheck report. It is worth the time ordering your Telecheck report and disputing mistakes and errors that may exist.

Telecheck in some instances also acts as a debt collector. The Fair Debt Collection Practices Act (FDCPA) governs what Telecheck can do when collecting a debt.

If you write a check and the transaction is declined because of Telecheck, the clerk doing the transaction is supposed to give you a courtesy card with a seven-digit Record Number written on the front of the card. You may contact Telecheck with that Record Number to inquire about the transaction.

The major difference when disputing an item in Telecheck as opposed to ChexSystems, is that Telecheck will remove your negative record once the item is paid. ChexSystems may retain a negative item, paid or unpaid for up to five (5) years unless the bank tells them to remove the item or you successfully dispute the item.

Telecheck is a consumer reporting agency under the Fair Credit Reporting Act and you are entitled to a free annual file disclosure you can visit them at

Can TeleCheck Be Sued?

ANSWER: There was a fairly recent (2014) class action lawsuit against Telecheck. However, it involved violations of the Fair Credit Reporting Act (FCRA). TeleCheck, along with its associated debt-collection entity, TRS Recovery Services, Inc., paid $3.5 million to settle charges made by the Federal Trade Commission for not properly investigating consumer disputes.

As far as a possible fraud lawsuit, that’s a question that can be better answered by an attorney. has good consumer law attorneys that may provide advice on whether or not you have a good case against Telecheck.

You raise an interesting fact about Telecheck causing financial loss to their vendors (merchants) who utilize Telecheck. You would think a merchant would be concerned with the high number of complaints regarding Telecheck. But that does not seem to be a deterrent. From what I researched and the number of comments I receive on this website, many consumers get denied check writing privileges based on Telecheck’s “Code 3” warning. Code 3 could mean something as innocent as not ever having written a check at that particular merchant; or, writing a check for an amount higher than your typical check writing pattern.

The statistical data is really just “guess work.” Unfortunately, merchants are willing to take a loss based upon Telecheck’s “guess work.” That’s their loss. Consumers should start complaining directly to the merchant’s corporate office – that might make a substantive difference in a merchant depending solely upon Teleheck’s statistical guess work in making a decision to accept a check.

If you believe there is inaccurate information being reported to merchants by Telecheck, don’t hesitate to dispute. Based upon inaccurate information merchants may continue to deny you check writing privileges. You have the right to dispute inaccurate information. If any inaccurate information is not corrected or deleted, make a complaint with not only the Federal Trade Commission but also the Consumer Financial Protection Bureau.

The best way to get your Telecheck report is to write them

Send the request for your file report to:

TeleCheck Services, Inc.
Attention: Resolutions Department-FA

P.O. Box 4514
Houston, TX 77210-4514

To verify your identity, Telecheck requests the following:
(1) a daytime contact phone number
(2) a copy of your driver’s license
(3) your social security number
(4) a copy of a voided check (I would not give them this piece of information as it is unnecessary to verify your identity and none of their business)

Declined Check Information for Check Writers

Returned Check Collection

Call to get your Free Annual File Disclosure pursuant to the Fair Credit Reporting Act

Fraud, Identity Theft, Forgery

TeleCheck Services, Inc.
14141 Southwest Freeway Suite #300
Sugar Land, TX 77478

More TeleCheck Resources

There’s no way to avoid TeleCheck when a merchant uses that service. Everyone is subject to TeleCheck no matter their banking history. If a merchant uses TeleCheck to verify checks, then you are subject to TeleCheck, there’s no getting around them unless you choose not to write a check.

What information does TeleCheck verify?
Is TeleCheck legitimate?
How long does TeleCheck stay on your record?
What is TeleCheck used for?


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