How to dispute information in Chexsystems

By Lisa Phillips on May 23rd, 2011 in Chexsystems, How to Guides

Chexsystems is a credit reporting agency just like the 3 major credit bureaus which means you have the right to dispute any information in your Chexsystems report.

Since Chexsystems is a consumer reporting agency they are subject to the Fair Credit Reporting Act and must investigate any dispute you submit.

Chexsystems has thirty (30) days to investigate disputes. If the disputed item is not verified by the reporting bank, financial institution or credit union, it must be deleted from your report.

You will need your Chexsystems Report in order to initiate disputes and at the end of this article you can find out how to order your Chexsystems Report.

The Dispute Process
Chexsystems has thirty (30) days from the date your dispute is received to investigate the dispute. If you obtained your Chexsystems report by requesting it from t he FACTA Free Annual Report Annual the law extends the dispute response period to forty-five (45) days.

Dispute by U.S. Mail
When disputing information in your Chexsystems it is better to write a letter dispute and send it via certified, return receipt U.S. mail. Disputing online makes it more difficult to create a paper trail in case you need it at some later date.

Dispute by Telephone
If you call to dispute an item in Chexsystems or even if you call to ask a question, Chexsystems will try to ascertain as much information about you as possible including your employer and all the banks where you have accounts for the past 5 years.

(MORE: Banks that offer Second Chance Checking Accounts)

NEVER give Chexsystems more information than is required for them to access your files. Remember, they are a consumer reporting agency and whatever information they collect only helps them, not you.

Under the Fair Credit Re porting Act, the only information they need to confirm your identity is your name, current address (not past addresses), date of birth, social security number, the bank name and account number you are disputing. Do not give them a history of your accounts for the past 5 years.

Verified Disputes
Once your dispute request is received Chexsystems must confirm they contacted someone at your financial institution to verify the information in dispute. Verified information in your Chexsystems report will remain in your file for up to 5 years. However, Chexsystems must explain how they verified the dispute.

The FCRA gives you the right to know how the dispute was confirmed. Send another certified letter requesting validation of the disputed item. The validation should include the name, address and telephone number of the business or individual who verified the dispute as accurate in addition to your signature on any original documentation from the bank.

Keep a good timeline and all return receipt cards from the post office. If Chexsystems cannot verify how they confirmed your dispute they must delete the item.

Unverified Disputes
If Chexsystems does not respond to your dispute within 30 days from their receipt of your dispute letter they must delete the item. You can confirm when they received your dispute letter by the return receipt card you get from the post office.

No response means they could not confirm the item and it must then be removed. Send Chexsystems another certified letter demanding they remove the item because they have not responded in the time allotted by FCRA Rules.

Dispute with ChexSystems First
You should always dispute with Chexsystems before you take action with the bank. Once you dispute an item, Chexsystems has 30 days to complete the investigation. You might get lucky if the bank does not respond by the alloted trimeframe and the item is deleted.

Also, by disputing with Chexsystems first, you create a paper trail in case you need it down the line for legal action. Chexsystems can only report “accurate” information according to the FCRA.
 

• 3 Alternative Methods to Disputing Chexsystems

Types of Inaccuracies to Dispute
Since FCRA Rules state you must “accurately” report all negative items, review your Chexsystems report for any inaccurate information you can use to get the item deleted.
 

• Date the bank reported you to Chexsystems
• Is the item being accurately reported to Chexsystems – Does your file list NSF activity, account abuse, fraud, overdrafts or negative balance.
• Date the bank first notified you the account became negative. When did the bank close the account and report it to Chexsystems. This will help determine when the Statute of Limitations begins. Items can remain in Chexsystems up to 5 years.
• Are you the primary account holder, if not, have you signed a signature card for this account. Request the original copies of your signature card. If Chexsystems cannot provide you with the proof they must delete the item.
• Is Chexsystems reporting personal information such as a name, address and social security number accurately.

Any deviation from accurate reporting is a violation of the FCRA and the item must be removed. This also includes clerical errors. Look carefully at your report to find any errors to dispute.

If you are unsuccessful in getting an item removed after disputing with the Chexsystems you can attempt disputing directly with the bank. They are also held to the FCRA Rules when it comes to reporting negative information. And, if you are willing to settle, you should negotiate a pay for deletion. As always, get the agreement in writing before you send any settlement funds.

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 proper paper trail, with copies of all your letters along with the certified return receipt. Your legal action should include proof that you properly notified Chexsystems of the error and they did not correct make a correction.

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.

You should be able to show how their failure to correct the error has harmed you in that you are unable to open a checking account and subject to using expensive alternative means to cash your pay check, pay your bills, etc. Once a small claims lawsuit is filed you will more than likely get the outcome you are looking for without even going to court. Lawsuits are costly and Chexsystems does not make any money by hiring an attorney to litigate. They will probably try to settle and remove the item from your ChexSystems report. Familiarize yourself with FCRA Rules. You can sue for each violation of the laws for $1,000.

Contact  Chexsystems
ChexSystems
Attn: Customer Relations
7805 Hudson Road
Woodbury MN 55125-1403
(800)513-7125-tel
(602)659-2197-fax
www.consumerdebit.com

Order Chexsystems Report
A Chexsystems Report can be ordered online at Chexsystems Consumer Assistance or you can call Chexsystems at (800)513-7125. When ordering your Chexsystems Report give only your basic information such as name, address, social security and date of birth. Even though you may be asked for additional information, you do not have to disclose your current employer or bank account in order to obtain your Chexsystems Report.

Get a Free Chexsystems Report
You are entitled to a free report under the Fair and Accurate Credit Transaction Act (FACTA) amendments to the federal Fair Credit Reporting Act (FCRA), once every 12 months. Go to Chexsystems Consumer Assistance.