Question: In 2008, I was reported to ChexSystems “Account Abuse”. Included in the report item was a line that read “Original Charge-Off Amount $0.01″. However, I never owed the bank ANY money. I have a receipt indicating that the bank gave ME $218 upon closing my account.
When I went to dispute the item with ChexSystems (on the basis of the inaccuracy of the “original charge-off amount” line) they came back and said that it had been verified by the bank, HOWEVER, they had modified the item, replacing the charge-off part of the item, with “ChexSystems has no debt information available”.
Does the FCRA actually allow a bank to simply modify an item to “make” it fully accurate (in essence, admitting that the original item was NOT fully accurate)? or is it mandatory that if any part of the entry is not accurate, the ENTIRE item must be deleted–and there is no allowance for correcting any information.
Also, can I challenge them based on the fact that they could not verify the charge-off amount, thus, still requiring them to delete the item because they could not verify the accuracy of all the information that was ORIGINALLY included in the item?
Answer: If the bank determined the amount was inaccurate and subsequently corrected the inaccuracy, then yes, the bank acted within the rules of the FRCA. However, judging from what you have written, I am not solely convinced the bank verified and updated the information at all as your report has been changed to say “Chexsystems has no debt information available.”
At this point I would send a certified, return receipt letter requesting the method of verification. The FRCA allows consumers to make this procedural request which forces Chexsystems to specify how they verified the information with the bank. This is a little practiced right of consumers under the FCRA, Section 611 (a)(6) and (7).
Chexsystems must give you this information within 15 days of the request or they will be in violation of the FRCA. Additionally, Chexsystems is required to send you the address and telephone number of the individual or business they contacted so that you can confirm the verified information.
It really bothers me that Chexsystems is allowed to report consumer accounts as “Abuse” because that term is so vague and no clear standards exists for the use of the reporting term. The fact that the term is so vague makes it harder for consumers to get Chexsystems items removed. That’s my rant for today.
But to get back to your issue, definitely send a method of verification request and be sure to send it certified mail. You want to create a paper trail just in case you have to pursue a Small Claims court action against Chexsystems.
The letter should be simple and to the point, here is a sample guildeline:
Dear Chexsystems Consumer Relations:
In response to my dispute of (account number) allegedly verified by (Bank Name), I hereby request how the dispute was verified and determined to be accurate. Please provide me a copy of any documents provided by (Bank Name).
In addition to the procedural request, provide the name, address and telephone number of each person contacted at (Bank Name) who supposedly “verified” the information. As you know, you must provide me with this procedural request under the FRCA within fifteen (15) days after receiving this request.
Please be advised that this is my final attempt to have this matter resolved accurately. This item should be deleted as it is reporting inaccurately, represents an error in your reporting and my banking abilities have been severely restricted. I have maintained a meticulous record of my correspondence with you should I have to file complaints with the Federal Trade Commission, my state’s Attorney General and a Small Claims action for violation of the FRCA.
(Print or type your name here, do not sign)
Be mindful of your timeline and calendar the expected response date from Chexsystems (15 days from the date they receive the procedural request). Some consumers have been successful at this point in getting the item deleted but if this does not work try disputing directly with the bank.
Under the Fair and Accurate Credit Transactions Act (FACT Act) you can dispute directly with the furnisher of information. The bank will be under the same 30-day time constraint as Chexsystems to investigate or delete the item. Send the letter to the corporate headquarters and if you can get the name of a Vice President, President or CEO that would personalize the letter and get immediate attention.
Here is a sample guideline letter:
On (date) I disputed an inaccurate item (account number) you continue to report and verified as accurate to Chexsystems. Your bank has reported the item as “Account Abuse.” This erroneous and inaccurate information has damaged my financial reputation and prohibits me from obtaining a new bank account.
I request it be deleted immediately as there has been no illegal activity on the account, (Bank Name) in no way experienced any financial loss and no money is owed on this account. In fact, upon closing this account, (Bank Name) reimbursed me $218 and I maintain a receipt indicating such return of funds. There has been no violation of the account agreement.
As previously stated this false information of “Account Abuse” is damaging and should be removed immediately. Under the FACT Act I hereby call for an investigation of this matter and request this item be removed immediately from Chexsystems.
cc: (The branch where you opened the account)