Data collection happens at every corner, from your online browsing history to what you buy at the grocery store. So, it comes as no surprise that your history of writing checks is also tracked.
One of the most prominent agencies collecting data on your check-writing behavior is TeleCheck.
Much like ChexSystems, if your past involves writing bad checks or having insufficient funds, there’s a strong chance that your history has been cataloged in TeleCheck’s system.
This can lead to several unfortunate consequences, including having your checks declined at the checkout counter of stores like Walmart, Walgreens, Kmart, and Kroger.
However, once you understand how TeleCheck works, you can take control and begin to reverse the damage caused by the information there. Then you can begin rebuilding your checking account history, so you never have to worry about declined tenders again.
What is TeleCheck?
TeleCheck Services, a wholly-owned subsidiary of First Data Corporation, is a check acceptance company and consumer reporting agency. However, unlike the better-known credit bureaus, TeleCheck focuses primarily on your check-writing history.
This is in contrast to the payment and consumer debt history tracked by Equifax, Experian, and TransUnion. In addition, retailers and other merchants can utilize TeleCheck in real-time to instantly determine if they should accept your check as an appropriate form of payment.
If you’ve ever tried to use a check at the cash register and had it declined, it’s most likely because of TeleCheck. The agency uses a broad range of data to help inform retailers, including any negative information related to your past check transactions and bank accounts.
TeleCheck New Account Screening
Similar to ChexSystems and Early Warning Services, they help banks decide whether you should be approved for a particular type of bank account.
Having multiple safeguards in place may be helpful for financial institutions, but it can oftentimes be a hassle for you if you’ve had a bumpy past with writing checks.
Like all consumer reporting agencies, however, TeleCheck is subject to regulations from the Fair Credit Reporting Act. This protects consumers like you from having inaccurate or unfair financial information curtail your access to different financial products and accounts.
How does TeleCheck work?
TeleCheck Services integrates its services into participating merchants’ points of sale. As you stand at the register after handing over your check, the TeleCheck system quickly analyzes the check to see if you have any negative history or other risk factors.
It uses a predictive risk-scoring model to recommend whether the merchant should accept the check. If the system determines that your check is likely fraudulent or at risk of having insufficient funds in the corresponding checking account, it will not recommend that the merchant accepts it.
The merchant can make their own decision of whether to actually take your check but only receives a guarantee of funds from TeleCheck if their advice is taken.
You can imagine that most merchants generally won’t take a check declined by TeleCheck because they run a greater risk of not actually receiving those funds.
TeleCheck Verification Process
While TeleCheck’s exact formula is unknown, it is certain that two different types of data are collected: your debt history and your check history. Your debt history here doesn’t have anything to do with your outstanding credit card balance or your monthly mortgage payment.
Instead, TeleCheck reviews debt records submitted by merchants from across the country who report customers that have outstanding debts based on checks or other forms of payment.
Fraudulent Checks & Insufficient Funds
TeleCheck also researches profile characteristics of fraudulent or insufficient checks. Using this data, they can predict what a bad check looks like and consequently recommend the merchant decline the transaction.
TeleCheck’s goal is to help merchants reduce their risk of losing money by accepting checks that they can’t actually cash. But, unfortunately, the system often unintentionally hurts innocent customers who rely on this form of payment.
Why does TeleCheck decline my checks?
It’s impossible to know what exact parameters TeleCheck uses to decide on approving or declining a check. But there are some factors that absolutely affect your history within the TeleCheck system.
We’ve identified six major categories that can influence your ability to have a check accepted at the cash register. Familiarize yourself with each one to determine which likely has the greatest impact on your check writing abilities.
1. Human Error
It’s an unfortunate reality that our lives are often adversely affected by mere human error. Unfortunately, there are several points where this can impact the acceptance of your checks through TeleCheck.
For example, any accidental errors in the information listed on your driver’s license or other forms of ID can trigger a red flag. A cashier might also mistakenly key in your information incorrectly. No matter how amazing technology becomes, there can never be a perfect system due to the simple existence of human error.
2. Risk Factors
TeleCheck uses numerous variables to determine the risk related to accepting each check. While there are too many to count, TeleCheck does review related statistics on how likely fraud is to occur.
This includes what kind of goods are typically bought, how much is spent, and what stores are more prone to fraud risk. On top of these broad factors, TeleCheck continually monitors and analyzes more specific trends to determine potential risk profiles, even if it’s not relevant to your personal financial history.
3. Past History
Your profile is also flagged if you have a history of writing bad checks. This can include writing a check with insufficient funds in your checking account or even trying to float a check for a few days until your next paycheck hits your bank account.
While many risk factors are broad and based on research and indicators, this one is entirely specific to your financial behavior.
4. Unpaid Debts
We mentioned earlier that TeleCheck tracks check debt, and this history plays a huge role in whether a merchant accepts your check.
So if you’ve racked up unpaid fees for overdrafting or other infractions with your bank, they can come back to haunt you. Even if you eventually pay off that debt, it’s still attached to your history with TeleCheck.
5. Insufficient History
Not only can a negative check-writing history affect your standing in TeleCheck, a brief or non-existent history may also have a negative impact. So if you don’t write checks very frequently, TeleCheck may determine that they don’t have enough data to make an informed decision.
This situation typically (and unfortunately) results in having your check denied at the point of sale. It’s really the same conundrum you’d have if you were trying to get approved for a credit card but didn’t have enough of a credit history to qualify for one.
6. Victim of Fraud
Even when you’re the victim, bank account and check fraud can negatively affect your TeleCheck profile. For instance, if you reported stolen checks, that information is typically forwarded to the consumer reporting agency, and any check numbers from that book would be declined.
You might also unknowingly be the victim of fraud if someone uses your driver’s license number in connection with cashing bad checks. Even if your personal information was compromised, but you don’t know about it, that information can be linked to your TeleCheck account.
How can I check my status with TeleCheck?
It’s important to understand what specific items might be plaguing your ability to write checks at the store. Just like you’re allowed to access one free credit report each year, you’re also allowed to get a free copy of your TeleCheck report.
You can also get a free report if you’ve had an “adverse action” notice, such as having your checking account application denied because of your TeleCheck report.
Requesting your copy is easy to do on TeleCheck’s website. And doing so can help you make sure that everything on there is accurately reported.
Even if the negative information is accurate, even just knowing what’s on there can help you fix problem areas in your finances and start making choices that will positively build your check and finance history.
How to Request a Copy of Your TeleCheck Report
To get your free report from TeleCheck, you can send them a request through the mail. However, you’ll need to include a few extra pieces of information to help TeleCheck confirm your identity:
- Your daytime phone number
- Photocopy of your driver’s license
- Your social security number
- A voided check
However, while this information is suggested, many experts warn against sending in a voided check and state that the rest of the documents should be sufficient.
Once you’ve compiled this information along with a brief letter stating your request, you can send it to the following mailing address:
TeleCheck Services, Inc.
Attention: Resolutions Department-FA
P.O. Box 4514
Houston, TX 77210-4514
Be sure to include your most recent mailing address in your letter so that TeleCheck can send your report to the right place.
They’ll only communicate with you to confirm your information to protect your privacy, and you should receive your report within 15 business days. If you don’t, contact TeleCheck to follow up with them.
If you still have trouble getting a copy of your report, consider filing a complaint with the FTC. In most cases, however, you should receive a timely response.
If you are declined by TeleCheck, you will receive a code explaining the reason. It will usually either be Code 3 or Code 4.
TeleCheck Code 3
If you receive this code when you attempt a transaction, it doesn’t mean you have a negative history with TeleCheck. It simply means that your check was declined for other reasons. You might get a Code 3 if you don’t have much of a check-writing history. It’s also possible that you happen to match a risk profile in the system.
TeleCheck Code 4
This code usually means that you do have a negative history with TeleCheck. A Code 4 usually signifies a potential fraud risk from the check writer.
How to Dispute Information on Your TeleCheck Report
After reviewing the information listed on your TeleCheck report, you may discover one or more inaccuracies. Perhaps you’ve unknowingly become the victim of check fraud and have multiple negative items associated with your bank account.
Or perhaps there are accidental unpaid charges listed that don’t belong to you. Whatever the reason may be, you legally have the right to dispute any information you disagree with on your report.
Submitting Your Dispute
All disputes must be submitted to TeleCheck Services via mail. Start by downloading the appropriate form from the TeleCheck website.
You’ll need to fill out each field, including your contact information, financial institution information, driver’s license number, and social security number. Then, you’ll have room to list out your disputed items. A single form allows space for six disputes and includes a section for any additional comments you’d like to relay.
You’ll need the name of the financial institution and the relevant account number, as well as the reason you are disputing the item.
TeleCheck also states you can submit any supporting documentation, but we do not recommend doing this. As a consumer reporting agency, it is their job to verify the accuracy of the information they include in your report.
TeleCheck Contact Information
When you’re ready to send in your paperwork, you may mail it to the following address:
TeleCheck Services Inc.
Attention: Resolutions Department
P. O. Box 4513
Houston, Texas 77210-4513
You can also fax it to 402-916-8190, but we don’t recommend doing this for two reasons. First, your dispute paperwork contains sensitive personal information like your social security number.
Secondly, there’s no way for you to confirm that TeleCheck actually received your form. So, when sending a hard copy, you can request a return receipt that shows you the letter has actually been received by TeleCheck.
Telecheck Phone Numbers
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
How does the dispute process work?
Thanks to the FCRA, TeleCheck must investigate all disputes within a certain period of time. If you requested a free report, they have 45 days to respond; otherwise, they only have 30 days to do so. As part of the investigation process, TeleCheck will attempt to verify the information from the company that originally reported you.
If the company can’t verify the item, it should be removed from your report. Just like negative credit items, any verified items on your TeleCheck report remain there for seven years. In many cases, however, it’s possible to have those items successfully removed early.