Checking Accounts and ChexSystems

March 10, 2006 – If you have never heard of ChexSystems, you are not alone. But if you have a checking account, it’s history is tracked in much the same way that credit reports track various lines of credit you may have. ChexSystems is the company that does this tracking, and the items that appear on your ChexSystems report should be just as important to you as your credit report. If the report is bad, you may be forced to close your checking account, and not be able to get a new account at any bank.

ChexSystems is most concerned with bouncing checks. If you don’t have the funds in your account but you write a check anyway, you’ll wind up with a negative mark on your ChexSystems report. That blemish will remain on your report for five years.

If you get enough bad marks, then your bank will force you to close your checking account. Furthermore, you will find it very difficult to open a checking account at most other banks too. That’s because most banks look at your ChexSystems report before they will allow you to open a new checking account.

Not having the ability to open a checking account can be a real hassle. It means that you will have to pay your bills by money order, which is inconvenient and expensive. Roughly 30% of all consumers find themselves in this position for any one of a variety of reasons.

For those who have been barred from opening a checking account due to bouncing checks, there may be some things that you can do to help yourself.

A number of major banks allow consumers to take classes on the responsible use of checking accounts and overall financial responsibility. Those that complete these education programs and pass a test will then be allowed to open new checking accounts.

These re-education programs are really only for people who made an honest mistake. They didn’t keep their check register up to date, or balance their account properly at the end of a month. If you are suspected of being involved in fraud, a note to that effect will appear on your ChexSystems report and you will be barred from taking any classes.

Classes are not available in every state. Some states simply don’t allow them. You should check with your bank to find out if there are classes in your area.

For those who don’t want to take classes, Gold Coast Federal Credit Union in Palm Beach, Florida offers what they call a "Fresh Start" program for those who have had problems with bounced checks. In order to get a checking account through them, you have to pay a $10 monthly fee, plus have direct deposit for your pay checks. If you manage to go through a year without bouncing a check, they will convert your account to a free checking account. If not, they won’t cancel you account but you will be hit with hefty fees for bouncing a check, and the count down clock for free checking will start all over again.

If neither of these options are viable, then there is one more resource that you can try; a website named ChexSystems Bites. This website is build more like a personal home page than a professional site, but don’t let that fool you. It is packed with information on ChexSystems. The link above will take you to a page that allows you to look up banks that don’t use ChexSystems in the checking account setup process.

The site contains contact information for ChexSystems and has a very interesting "Hall of Shame" area.

Consumers should also be aware of their rights with regard to their ChexSystems report.

By law, if you are turned down for a checking account due to information that appears on your ChexSystems report, you can request a free copy of your ChexSystems report within 60 days of such action. While not considered to be a credit bureau, ChexSystems is a consumer reporting agency that is covered by the terms of the Fair Credit Reporting Act (FCRA) and the more recent Fair and Accurate Credit Transactions Act (FACTA). This means that you have the same dispute resolution rights with ChexSystems that you would have with the big three credit reporting agencies. It also means that you are entitled to view your ChexSystems report for free once every year.

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Be Careful Prior to Including Private Information in a Fax Message - Ask Before You Fax

March 8, 2006 – If you have ever used a fax machine then you probably assume that the person receiving a message you send is simply picking up a page that was printed on another fax machine. But more people and businesses are utilizing virtual fax machines to distribute the messages that they receive. And these types of services present new dangers for consumers that most people are unaware of.

A virtual fax machine is simply a service that anyone can subscribe to for a monthly fee. Subscribers may not have a fax machine of their own but they are given a fax number that they can print on their business cards, or provide their associates. The outside world simply assumes that anyone with a fax number has a fax machine.

This assumption presents some very real privacy concerns for anyone sending a fax message with highly personal data. It is not uncommon to include information such as a Social Security Number, bank account information and dates of birth in fax messages. You may be providing information to your accountant, an attorney or even a bank. This is information that you probably wouldn’t dream of including in an e-mail message.

Unfortunately, if the person who is receiving a fax message with this type of highly sensitive data in it also uses a virtual fax service, then all of that sensitive data will wind up in an e-mail message. And e-mail can be intercepted and read by virtually everyone.

It is not just small companies that use virtual fax services. These services can provide businesses with some significant advantages. A single fax message can be delivered to an e-mail address which will then automatically distribute the fax to a large group of people. This is a clear advantage for businesses that have multiple people involved in a decision making process.

This same capability can be used by individuals. Road Warriors will appreciate the fact that having a virtual fax allows them to receive their fax messages from nearly anywhere.

But this added business utility is countered by the fact that if a fax message that you send contains your Social Security Number, or other highly personal information, it may be distributed to a large list. And the more people who are given access to this information, the greater your chances are to become a victim of identity theft.

An additional risk associated with virtual fax machines is that messages can easily be forwarded to anyone else with an e-mail address.

Consumers should always be reluctant to provide their Social Security Number. As a consumer, you need to know what your information will be used for. But there are times that it is unavoidable. If you are applying for a loan, or insurance. When you are dealing with your accountant on tax matters. These are times that you may actually feel little or no reluctance to provide highly sensitive information in written form and place it in a fax message.

ACCESS is advising consumers to "ask before you fax". Ask whoever you are faxing information to if they actually have a fax machine that will receive your message or if they are using a virtual service such as eFax. If a virtual service is used, tell them that you will send your fax without including certain highly confidential information like your SSN and your mother’s maiden name, but that you will call them with that information after they have received your fax. If they won’t agree to that, then there are a couple of options.

First, suggest that you mail the information to them. If you do this, use an overnight delivery service or a tracking service that is offered by the post office. Don’t simply stuff your information into an envelope and send it. If it gets lost, you’ll have no idea who has access to it.

Second, consider changing who you do business with. If a company that you do business with is more concerned with their own convenience than they are with protecting your identity, then they may not be the right business partner for you.

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Data Stolen on Elderly Washington, DC Residents - An ACCESS Fraud Alert

A server belonging to Georgetown University, and which was used to store data belonging to the DC Office of Aging (DCOA) was hacked into in late February. The server contained the names, dates of birth and Social Security Numbers of more than 40,000 elderly Washington, DC residents.

 

DCOA coordinates services for Washington, DC’s elderly population. They use certain facilities belonging to Georgetown University to host their data. On February 12th the server containing the breached data was hacked into, and the data was apparently downloaded. The hacking was noticed due to a routine review of the university’s network security.

 

Georgetown has not given an explanation but the theft was not reported to DCOA until February 24th. DCOA then filed a report with the United States Secret Service.

 

On February 28th, the Secret Service seized the computer that had been hacked into and began a forensic analysis of it. They are attempting to determine exactly who hacked into the system.

 

Georgetown has setup a hotline to answer questions about the data theft. It can be reached at 866-740-2548.

 

ACCESS is advising any Washington, DC residents that believe that their data may have been included in the files stolen to call the hotline. Although residents of Washington, DC don’t have the ability to place a freeze on their credit file, anyone who believes that their data may have been compromised should also contact the national Credit Reporting Agencies (Experian, Equifax and Trans Union) and place a fraud alert on their credit file. And finally, we are urging those who may have been impacted by this breach to check their credit report.

 

In an ironic twist to this story, Georgetown University is known for being able to provide experts to companies and the government to deal with matters of privacy and data breaches. Among the universities professors is Marc Rotenberg, who regularly testifies before Congress on matters concerning identity theft, and who is president of EPIC (Electronic Privacy Information Center).

 

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