What is ChexSystems?

How it works:
U.S. banks and credit unions report incidents to ChexSystems to protect themselves and other banks in the future. You get reported to ChexSystems if your account is closed for "cause." What is "for cause?" Banks differ greatly between them as to what valid reasons are for closing an account. Here are some examples:

• The bank was unable to collect for an overdraft, ATM transaction, or automatic payment which they honored on insufficient funds.(Regardless of amount, and often without waiting more than a few days!)
• Multiple overdrafts.
• Savings account, debit card or ATM abuse.
• Fraud.
• Providing false information in opening account.

Each incident stays on your record with ChexSystems for FIVE full years from the date the incident was reported.

Getting an incident reported to ChexSystems is the Kiss Of Death for your financial future. Most banks now say: "Our bank policy is that we will not open a checking account for you if you have one or more incidents reported to ChexSystems." Scary.

For more details about this system and what to do if you get reported, check out these excellent resources:

• On our website: Sample letter requesting ChexSystems to validate and remove a listing from their database.
• http://chexsys.tripod.com/
  
• Bounced from the bank
• And here is the website from good ole ChexSystems itself.

Want to find a non-ChexSystems bank? Here are some free resources (yeah, they're REALLY free). However, bank policy changes ALL of the time, so you should call these banks first to see what their current policy is.

• http://www.cardreport.com/dirs/non-chexsystems-banks.html.
• http://www.recycledmusic.com/distance/
• http://chexsys.tripod.com/goodbanks.html
• Here's a good forum for people trying to find a good bank or learn how to get out of CheckSystems.

One man is proceeding with a lawsuit. Read up on it here.

Here is a complete report done by a community service non-profit. They also give a list of recommendations.

July 8, 2002 update:
Can you believe it? ChexSystems now does collections: http://www.chexhelp.com/english/publik/faq.htm