ChexSystems: Another Lurking Database

If you buy your checks from Deluxe Corporation, the largest of the check printers, there are some facts you should know about this company. CardReport.com, a site packed with good information for your credit needs and woes, provides insight into ChexSystems, a Deluxe subsidiary that maintains negative information on your checking and savings account habits.

These include accounts closed for reasons of insufficient funds (bounced checks) or ATM overdrafts. Deluxe claims 80 percent of all banks will contact ChexSystems re. new checking and savings accounts, according to CardReport. The database comprises some 19 million old accounts listed as “Closed For Cause” by the bank. And there you have that dirty word again…database.

Personal data incorporated into this database includes your name, address, Social Security number, driver’s license number, and more. Deluxe also owns Shared Check Authorization Network (S.C.A.N.), which verifies checks for over 77,000 retail locations nationwide. And not to be denied the junk mailer’s devious craft of selling your name and private information for a profit, they have another company by the name of Deluxe Data Resources, which sells detailed consumer demographic data on 100 million households.

Bankrate.com, one of the most comprehensive sites for credit info I’ve run across, confirms that 80 percent of U.S. banks do belong to the ChexSystems network. They also recount grass-roots efforts against ChexSystems by Web sites such as PassChecking.com, set up entirely to help consumers fight the system. Later in this post, I will show you other sites that either report on ChexSystems or are activists against the company.

Bankrate questions why a few overdrafts should place you on the blacklist for five years and goes on to note that it is the bank that actually causes that to happen. ChexSystems merely provides the database—there’s that dirty word again—that allows the bank to act. If you end up on its list through error, ChexSystems professes to help correct this both within their company and with the participating banks.

Let me say that I don’t believe most consumers would condone the flakes that regularly write bad checks or hit the ATM for cash that is not in their account. I know I don’t. It is dealing with these individuals, compared with those innocent souls that found their way on to this list erroneously, that bothers me. That and the resulting monstrous database. ChexSystems is regulated by the Fair Credit Reporting Act, so, at least, you do have the right to a free report.

If you Google ChexSystems, you come up with a site named Consumer Debt Resource, which apparently is the company, minus the bad-press name. In all fairness, there is an abundance of consumer credit information available, but you won’t find any details on the personal data that is compiled by ChexSystems, or its parent, Deluxe Corporation.

You won’t see another Deluxe company on the site: Checks Unlimited, formerly known as Current Checks. Checks Unlimited is a junk mail supplier of checks, with 8.3 million customers whose names are sold along with their lifestyles—forty-three, based on their check purchases—from book readers to pet owners to gardeners, environmentally conscious, investors, Republican prospects, to young children and teens. That’s database number four for Deluxe, with individual household, private information.

And now on to the Web sites I promised earlier that attempt to deal with ChexSystems (CS), each in its own way. First, ChexSystems Bites! places the company in its HALL OF SHAME for “developing and profiting from the terribly flawed system known as the ChexSystems Network.” The National Check Fraud Center provides a running commentary about CS, of benefit to anyone on their list. Carreon and Associates’ Better Credit-Better Life site has an in-depth report titled, “Getting Around ChexSystems,” which seems to speak for itself.

Yahoo! has a page listing other sites that deal with CS, one of which is “Fight Back Against ChexSystems.” Consumeraffairs.com has a short blurb called Chex Imbalances that compares CS with ChoicePoint and Bank of America, exposing CS’s freedom from public oversight, although its “practices have spawned a Web-based subculture of horror stories…”

Finally, there’s the “Mother” of all anti-ChexSystems sites: ChexVictims. You have to sign up to get the best information and participate, but it’s FREE and takes only a couple of minutes. From finding the 20 percent of banks that do not cooperate with CS, to joining in on discussions and telling your personal story, this site means business. ChexVictims even gets into general credit problems that can result from being a CS victim.

With all the animosity toward ChexSystems, it makes you wonder where all this momentum comes from, and I think I have the answer. That’s right, the dirty word…database. Just another collection of your names and personal data that is probably ripe for the picking and somewhere on the priority list of ID thieves. Well, consumers are dead-tired of this and they aren’t going to take it much longer!