Ever had a check denied at the cash register? If so, you may be in the Telecheck system for a transaction you are unaware of causing Telecheck to deny your check.
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 a 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 and credit unions will utilize Telecheck when deciding to open a checking account. This process may even be in addition to Chexsystems. 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 some type of predictive risk scoring model that allows merchants to determine whether or not they should accept your check.
Of course the check writer is not privy to this risk scoring model but it relies upon historic statistical models which 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 and on the check writing patterns of the consumer. If you are in the Telechecks 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 do not want to assume the risk.
A decline by Telecheck does not mean your check is bad
Telecheck does not have access to your bank account balance. Your check may be declined simply because Telecheck does not have sufficient information in their databases about you to complete the verification process. This does not mean you have done anything wrong.
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. Telecheck retains adverse information for 7 years. Read “8 Reasons your check may have been denied by Telecheck” for more information about why Telecheck declines checks.
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 http://www.firstdata.com/telecheck/telecheck-declined-check.htm
The best way to get your Telecheck report is to write them
TeleCheck Services, Inc.
Attention: Consumer Resolutions-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 voided check (I would not give them this piece of information as it is unnecessary to verify your identity and none of their business)
(5) a copy of a tax or utility bill reflecting your current address
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.
Houston, Texas 77056