Every year, millions of consumers open bank accounts—and every year, millions are rejected.
It can be quite a surprise applying for a new checking account only to be turned down. After all, you are not applying for a credit card, just a simple bank account. This isn’t something most customers expect to run into obstacles with.
While there are a number of reasons why consumers are rejected for checking accounts, one is a system called TeleCheck, which provides risk analysis and check processing services to retailers and banks. If TeleCheck flags you as a high-risk consumer, you can be denied an account.
This is not the only situation where you might run into trouble with TeleCheck either. Perhaps for example you have a checking account right now, and you recently tried to write a check to pay for your groceries. Your check was declined, and the cashier explained it was because of TeleCheck.
How can you get back to writing checks and banking as usual? This guide will tell you how to get back in the clear with TeleCheck.
Table of Contents
- Common Reasons TeleCheck Declines Checks
- TeleCheck vs. ChexSystems vs. EWS
- Banks That Do Not Use TeleCheck or ChexSystems
- Account Services for Banks That Do Not Use TeleCheck
- TeleCheck Codes List
- Is TeleCheck Fair?
- How to Get a TeleCheck Report
- How to Dispute TeleCheck
- Companies That Use TeleCheck
- TeleCheck FAQ
- Helpful Tips for Consumers
Let’s dive in. Read on to learn everything you need to know if you are listed in TeleCheck.
1. Common Reasons TeleCheck Declines Checks
Many customers are bewildered when TeleCheck rejects their check or causes a bank account to turn them down for a new account. “But I have never written a bad check in my life,” they may reply, “so why am I in TeleCheck?”
There are a number of possible reasons why you might get a TeleCheck denial:
- If you do have a history of writing bad checks, that is one obvious reason to end up in TeleCheck.
- When an account number is rarely used for writing checks, TeleCheck may flag a customer as risky. The same can also happen with an account which has never been used to write a check before.
- Any report of fraud on your account can result in a red flag. This is true even if you were the one who reported it.
- If you have any debt previously on file with TeleCheck, that may result in denials in the future. This may be the case even if you are all paid up.
- Identity theft. If someone steals your driver’s license and uses the number for checking fraud (i.e. forgery, kiting, embezzlement, or abandonment), even through a different bank account that can be linked back indirectly to your account.
- TeleCheck uses a complex process called “risk decisioning” when choosing whether to accept or deny a check. When you write a check to make a purchase, the system checks whether you fit a common “risk profile” based on the purchases criminals tend to make, what industries they like to buy from, how quickly they move around geographically, and how much money they spend. If you happen to fit that profile, TeleCheck may decline you even if you are completely innocent.
There are also situations where TeleCheck may issue a denial for reasons entirely unrelated to you. If the cashier accepting the check makes a mistake inputting an ID number for instance, the system may create an inappropriate link between you and another customer.
If you are denied by TeleCheck, it is important to find out the reason so you can take action to set things right.
2. TeleCheck vs. ChexSystems vs. EWS
As mentioned at the start of this guide, if your name is in TeleCheck, it may cause multiple problems. Not only will your checks be denied, but if you go to open a new checking account, you may not be able to do so.
There are a couple of other financial monitoring systems which can also result in bank account denials, so it is important to know the differences between them:
- ChexSystems. This system is even more notorious than TeleCheck. You may be listed in ChexSystems for a variety of reasons relating to past banking blunders—anything from ignoring an overdraft fee for too long to fraud on your account resulting from identity theft.
- Early warning Services (EWS). The newest of the three systems, this database is co-owned by a conglomeration of banks. Like ChexSystems, it tracks many types of banking transgressions.
- TeleCheck. TeleCheck is a service provided by a company called First Data. TeleCheck provides check verification and maintains a database of check-related misconduct.
It is possible to be in more than one database. If you discover that you are, you will need to deal with each listing separately.
3. Banks That Do Not Use TeleCheck or ChexSystems
Need to open a new checking account? If you are in TeleCheck or you have a low ChexSystems score or have been flagged by EWS, you will need to either have your name removed from the databases, or find a bank which will accept you even with your record.
Disputing TeleCheck or ChexSystems can be a challenge, so in many cases, it is more realistic to look into getting a new bank account right away.
You can do this by applying at a bank or credit union which does not run verifications through ChexSystems or TeleCheck. Sometimes the accounts these institutions offer are referred to as “fresh start” or “second chance” bank accounts. Keep in mind that not all second chance banks ignore both ChexSystems and TeleCheck, but many do.
Read our in-depth guide to find out how to get started with banks that do not use TeleCheck or ChexSystems.
4. Account Services for Banks That Do Not Use TeleCheck
If you do go through a non-TeleCheck bank or credit union, the services you receive will depend on the institution. In general, you can expect most of the same features and benefits you would get with any regular bank account, such as:
- Online banking and bill pay
- Online money transfer
- Check writing
- Paperless statements
- ATM deposits and withdrawals
- Debit card
Keep in mind that if you are still listed in TeleCheck, you might still have your checks denied, even though you now have a functional checking account.
5. TeleCheck Codes List and Meanings
When TeleCheck issues a denial, it also provides a code which explains the reason. The two most common TeleCheck codes are Code 3 and Code 4.
- TeleCheck Code 3: If you receive this code for an attempted transaction, it means that TeleCheck did not have any specific negative information on file for you, but your check was declined for other reasons. You might get a Code 3 if you rarely write checks, or if you happen to match a risk profile in the system.
- TeleCheck Code 4: This is the code which will be issued if there is specific negative information on file for you.
Once you have your code, you can call the Check Writer Department at TeleCheck to ask for more information on your situation.
6. Is TeleCheck Fair?
Nothing is more frustrating than trying to pay a bill or purchase a product only to be rejected for TeleCheck for reasons that have nothing to do with you.
TeleCheck is hardly fair to consumers, considering so many of the reasons you can be flagged ultimately do not reflect your actions.
If someone else committed fraud by stealing your checkbook or your identity, you should not be the one who has to pay the price.
Likewise, you should not be denied the ability to write checks simply because you happen to fit a “risk profile.”
Thankfully you are not entirely helpless in this situation—you have the option to order a TeleCheck report and file a dispute.
7. How to Get a TeleCheck Report
In order to dispute TeleCheck, you first need to know what TeleCheck has on file for you. You send a request for your TeleCheck report to the following address:
TeleCheck Services, Inc.
Attention: Resolutions Department-FA
P.O. Box 4514
Houston, TX 77210-4514
With your request, you will need to enclose proof or your identity, because this is the only way for TeleCheck to search the database for your information. Provide the following items:
- A copy of your driver’s license
- Your social security number
- A daytime phone number
- A copy of a voided check
Then simply wait for your report to arrive and check it over when it does.
8. How to Dispute TeleCheck
If you do discover inaccuracies or data which is incomplete, you can dispute it. Download the form on this page on First Data’s website, and send it to:
TeleCheck Services Inc.
Attention: Resolutions Department
P. O. Box 4513
Houston, Texas 77210-4513
Submit any additional information you have which can help First Data to make a determination in your favor.
The entire process should be complete within 30 days of the company’s receipt of your dispute. If you end up sending along additional information, that could increase the timeframe needed to 45 days. After the investigation is complete, First Data will mail you the results.
9. Companies That Use TeleCheck
Looking for a TeleCheck merchant list? TeleCheck works with over 374,000 merchant locations. Some merchants that use TeleCheck include banking institutions such as Bank of America and SunTrust, as well as retailers like Sharp, Best Buy, and Kohl’s.
Does Walmart use TeleCheck? This is a very commonly asked question, and the answer is a resounding “yes.” Many consumers report difficulties with TeleCheck at Walmart.
If you are trying to get a specific answer to a question like “does Chase bank use TeleCheck?” or “does US Bank use TeleCheck?” it is always best to check directly with the institution. Sometimes this information is available on the bank’s website; other times you can call and ask.
TeleCheck partners with many eCommerce companies as well, and provides a full list here.
10. TeleCheck FAQ
Q: Am I in the TeleCheck system?
Wondering “how can I check my status with TeleCheck?” The best and fastest way to find this out is to contact First Data and ask. The next time a check is declined by a retailer, you can ask the cashier for the code and the phone number, or you can just call First Data now at one of these numbers.
Q: Can TeleCheck see how much money is in my bank account?
A: No. At no point does TeleCheck ever know what your bank account balance is.
Q: How can I make it more likely my checks will be approved?
A: You can actually prompt TeleCheck to file positive information on you. Contact First Data and send them the following:
- Your driver’s license number and state of issue
- Your social security number (if a financial institution referred you)
- The banking numbers you see printed at the bottom edge of your checks
- The record number of your declined check
TeleCheck may ask you for additional details. Once they verify your information, they will update your file with positive input. This will make it less likely that you will be declined again going forward.
Q: How can I protect myself against identity theft?
A: Purchase a subscription to an identity theft monitoring service. This may be less expensive than you think—such subscriptions often come bundled with tax preparation services at a discount. Keep an eye on the regular reports that the monitoring service sends to your inbox.
Q: What is the value of risk decisioning?
A: If you are denied by TeleCheck simply for matching a risk profile, you will probably feel quite angry, since you did nothing wrong. What is the point of risk decisioning? Does such an unfair system have any benefits for you?
The whole principle behind risk decisioning is to try and prevent fraud for merchants. Unfortunately, that entails making predictions about where and when fraud is statistically likely to occur. This can result in denials for you.
The good news is that some of the money merchants save through fraud prevention using TeleCheck gets passed back to you in the form of lower prices.
And if one of your checks does get rejected because of identity theft or check fraud, it will probably be the first you hear about it. This gives you a chance to take action before the situation gets worse. One denied check could actually end up saving you a lot of money and hassle if it helps you halt identity theft in progress.
Q: I reported fraud, but my checks continue getting rejected. What is going on?
A: There are a few possible explanations. One might be that your transaction is deemed “high risk” by the risk decisioning algorithms. The other possibility is that there is still fraud on your account, but not the fraud you reported. The fraud could concern checks outside the range you specified for example—perhaps checks you did not realize were among the ones that were stolen.
Q: How long can TeleCheck list me?
A: A negative listing in TeleCheck may remain for up to 7 years. This is one of the reasons it is so important to get in contact with First Data to check your file and dispute it if necessary.
11. Helpful Tips for Consumers
Here are a few useful suggestions to help you avoid problems with TeleCheck, and resolve them quickly if they come your way:
- When paying with a check, be sure to fill out everything correctly. While this should go without saying, you can never be too careful. One mistake could result in a TeleCheck denial code as well as future problems.
- Never write a check that you have insufficient funds to cover.
- If you have recently moved, changed your name, or had another major life change that could affect your basic information, consider avoiding using a check.
- If you will be diverging from your usual shopping patterns (by shopping on vacation for example), avoid using checks to pay for things. This may help you avoid getting flagged.
- Sign up for an identity theft monitoring service. Cybercrime is on the rise and data breaches are common even with major retailers; these days anyone can be at risk. An identity theft monitoring service will alert you if any unusual activity is detected, allowing you to take immediate action to clear your name with TeleCheck, ChexSystems and the major credit bureaus. Alert your banking institution as well.
- Remember that stolen checks can be used to commit fraud. Protect yours the way you would your credit card. If your checks are stolen, file a report with the police and also contact TeleCheck directly.
- If you are rejected by TeleCheck at a store, double check with the cashier to make sure he or she did not make a mistake.
- Do actually provide your personal information when you check your name in TeleCheck and request a report. Some people try to avoid doing this. Without your personal information, TeleCheck will be unable to locate your file. Do not worry, your information is private.
- TeleCheck is not the only company that provides verification and authorization on checks. Be sure to also check your record with similar companies such as Certegy. You may be listed in more than one.
Conclusion: TeleCheck Can Cause You Hassles, But There Are Steps You Can Take to Get Back on Track
If you are in TeleCheck, you may run into problems when you try to pay with a check, and you may find yourself unable to open a new bank account.
Thankfully, you are not without recourse to deal with the situation. The first thing you should do is get in contact with TeleCheck and request a report. If the report is inaccurate, you can file a dispute, which hopefully will result in your removal from TeleCheck.
If you need to open a bank account right away, you can choose a non-TeleCheck bank which offers a second chance bank account. Good luck, and continue exploring our site to discover more tips and advice to help you manage your finances.