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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.
what-is-telecheck
what-is-telecheck

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.

What Information Does TeleCheck Verify?

The information that TeleCheck verifies may include the following:

Identity Verification

TeleCheck verifies the consumer’s name, address, and other identifying information to ensure that the person writing the check is who they claim to be.

Check Writing History

TeleCheck maintains a database of check writing histories for consumers, which includes information about bounced checks, returned checks, and other negative information.

Bank Account Verification

TeleCheck verifies the consumer’s bank account information to ensure that the account is active and in good standing.

Check Amount Verification

TeleCheck may also verify the amount of the check to ensure that it is within the consumer’s typical spending patterns.

Is TeleCheck Legitimate?

Yes. There’s no way to avoid TeleCheck when a merchant uses that service, no matter your banking history. TeleCheck is used to help merchants and financial institutions make informed decisions about accepting checks from consumers and to minimize the risk of fraudulent or bad checks.

How Long Does TeleCheck Stay On Your Record?

TeleCheck may keep negative information about a consumer’s check writing history on file for up to five years. However, the length of time that TeleCheck keeps information on file may vary depending on the specific circumstances of each case. For example, if a consumer disputes a negative item on their TeleCheck record and the dispute is resolved in their favor, the negative item may be removed from their record sooner than the five-year mark.

It’s also worth noting that while TeleCheck maintains its own database of consumer check writing history, this information is separate from credit reports maintained by credit reporting agencies. Negative information on a TeleCheck report does not affect your credit score.

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.

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.

If you write a check and the transaction is declined due to TeleCheck, the merchant should give you a courtesy card with a seven-digit Record Number written on the front. You may contact TeleCheck with that Record Number to inquire about the transaction.

How To Order Your TeleCheck Report

TeleCheck reports can be ordered directly online at its website: TeleCheck.com.

According to TeleCheck’s website, the following information may be required to verify your identity:

  • name
  • mailing address
  • phone number
  • email address

If you prefer to mail your request send the request for your file report to:

TeleCheck Services, Inc.
Attention: Consumer Resolution Services
P. O. Box 6806
Hagerstown, MD 21741-6806

TeleCheck requests you include the following:

  • daytime contact phone number
  • copy of your driver’s license
  • your social security number
  • a copy of a voided check

Dispute TeleCheck Errors

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 your credit report.

When you dispute TeleCheck they must complete an investigation within 30 days to verify the accuracy of the disputed item. If TeleCheck cannot verify the item as accurate or fails to respond within the 30-day period, the information must be deleted.

The major difference when disputing an item in TeleCheck as opposed to disputing 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 http://www.firstdata.com/telecheck/telecheck-declined-check.htm

Can TeleCheck Be Sued?

Yes, TeleCheck can be sued. If a person  believes that they have suffered damages as a result of TeleCheck’s actions, they may be able to sue TeleCheck for various claims such as fraud, negligence, or violations of Fair Credit Reporting Act.

Several years ago there was a class action lawsuit against Telecheck involving 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.

But before seeking a lawsuit you can file a complaint with the Consumer Financial Protection Bureau (CFPB) about Telecheck if you believe that they have violated any consumer protection laws or engaged in any unfair, deceptive, or abusive practices.

Once you have filed a complaint with the CFPB, they will review your complaint and work with Telecheck to try to resolve the issue. If you are not satisfied with the outcome of their investigation, you can pursue legal action against Telecheck.

More TeleCheck Resources

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