Get Out Of ChexSystems

If you have sought and been denied a bank account, it is likely due to a negative listing on ChexSystems. ChexSystems is a network made up of financial institutions that keep track of individuals who have imperfect banking records. Items such as insufficient funds (NSF) or accounts that are closed with money still owed are reported to member institutions. Once reported, negative information may remain on your ChexSystems report for up to five years making it difficult for you to open an account with any ChexSystems member institution. More information aboutChexSystems.

Disputing the ChexSystems Report

If you think a report might be inaccurate, it is possible to dispute information in your ChexSystems file. If the bank and ChexSystems cannot prove its accuracy, negative information must be removed. The fact you paid all the money owed to the bank on an account does not mean the bank or ChexSystems must remove the negative mark. We’ve put together several simple letters you can adapt for the purpose of asking the bank and ChexSystems to prove the accuracy of a negative mark. Once you have successfully removed erroneous or unproven information from your ChexSystems report, you should be able to open a bank account again without any problems.

Please Note: These steps are provided for informational purposes only and do not constitute legal advice. If you need legal advice about your ChexSystems situation, please contact an attorney.

• Step 1: If you haven’t done this already, obtain your ChexSystems report. Go to the ChexSystems website at ConsumerDebit.com and request a free report. Legally you are entitled to a free report annually, or if, in the past 60 days, a bank refused to open an account for you because of information in ChexSystems.
• Step 2: Once you have your report, reference the information that you wish to challenge using our sample dispute letter Chexsystem Dispute Letter 1. You must send your dispute letter via certified mail with return receipt requested. This provides proof of the date that your dispute was received, which can then be used to have your information removed under the Fair Credit Reporting Act if they do not act in a timely fashion.
• Step 3: ChexSystems has 30 days to provide verification of the negative mark or delete it. If you hear back from ChexSystems within the 30-day time frame, you’ll need to request verification from the original bank as well as ChexSystems. Send ChexSystems Verification Letter 2 to ChexSystems and Letter 4 to the original bank that filed the information with ChexSystems. Remember, these letters must be sent certified mail with return receipt requested.
• Step 4: If you DON’T hear back from ChexSystems within the 30 day time frame, send Letter 3 to ChexSystems and Letter 4 to the original bank. Again, all letters must be sent via certified mail with return receipt requested.
• Additional Notes: If the information on your ChexSystems report is accurate and can be verified these steps may not remove it from your ChexSystems report for more than a few days. However, while the information is removed, you may be able to open a checking account.

What Constitutes Acceptable Proof

Acceptable proof can take many forms such as a copy of the canceled check or a copy of the original banking contract you signed when you open the account. Without these records the information must be removed as unproven and the negative information must be removed from your ChexSystems report.

One Final Option

If, after following the steps above, the bank verifies that you did fail to bring your account to a positive standing or that there’s still money owed, there is still one final option that may enable you to get out of ChexSystems for good. The bank is required by law to report to ChexSystems that uniformly disputed information in your ChexSystems file. If they do not, they are in violation of the Fair Credit Reporting Act (FCRA) and you can sue to have the information removed. As long as you sent the letters certified mail with return receipt requested, you’ll have the proof you need to file suit.

• Step 1: Request your ChexSystems report again at ConsumerDebit.com exactly 30 days after your verification letter is received by the bank. Your updated ChexSystems report should have a note stating, “Consumer disputes as per FCRA” or something similar under the disputed account record. If there is no note, the bank has broken the law and you are within your rights to file suit.
• Step 2: Send a letter to the bank letting them know that you intend to sue within 30 days due to their failure to comply with the FCRA unless they delete all records of the debt and remove you from ChexSystems. In many cases this is all that is required and the bank will remove the information to avoid being sued.
• Step 3: If the bank does not respond, you’ll need to take them to small claims court. There’s a  filing fee for this, typically around $40. Remember, you are not disputing whether or not you owe the debt at this point. You are only suing based on the fact that the bank has failed to comply with federal law regarding fair credit reporting. In most cases the bank will settle, but even if they do appear in court, you will win the suit because you have proof that they violated the FCRA by not complying with the regulations to place the notice on your ChexSystems file!