If you’ve ever been denied an application for a bank account, you may be wondering what exactly went wrong. While there are several possibilities out there, one potential cause is Early Warning Services.

open a bank account

This risk detection service screens bank account applicants to help financial institutions make sound decisions. While the goal may be fraud prevention, EWS’s tactics impact individuals across the country.

Find out exactly what EWS does, how it affects you, and how you can potentially stop it from hurting your banking future. We’ll take you through the process so you know what to expect when dealing with EWS.

What is Early Warning Services?

Early Warning Services is a relatively new creation that allows financial institutions to evaluate the risk potential for new clients. If the applicant is deemed too risky, they are denied service at the bank or credit union. Sound familiar?

It’s an extremely similar service as TeleCheck and ChexSystems. EWS was created jointly by several large banks including Wells Fargo, JP Morgan Chase, BB&T, and Bank of America. It’s not always seen as competition to TeleCheck and ChexSystems, rather it’s often considered an additional level of security during the screening process.

Specifically, EWS is meant to identify individuals who have committed financial fraud in the past. The term fraud refers to a wide variety of activities, and you may even be flagged if you inadvertently tried to cash a fraudulent check you received from someone else.

While the process may help banks in evaluating applications, it can be extremely damaging for individuals. Luckily, there are ways to circumvent Early Warning Services and even clear your record.

How does EWS screening work?

Early Warning Services is a subscription service that banks and credit unions pay to use. It screens bank applicants and sometimes even current account holders for a number of different things.

These include any previous history of fraud or account abuse, forgery, counterfeiting or check altering, paperhanging or check kiting, and verifying identity and authenticating account ownership. The screening can occur at any point of interaction, such as online, over the phone, or at the teller window.

While EWS screening doesn’t entail looking at your credit history, it does review your past banking behavior. It looks at information from a variety of sources, including other financial institutions as well as third parties.

Bank of America

The data primarily pertains to deposit accounts and how you’ve used them in the past. They don’t just focus on negative data; they include positive data points as well. According to EWS, they take extra care to ensure any information used in the evaluation process is accurate and validated.

Of course, you can check to see exactly how true the accuracy is and it’s also possible to dispute items you don’t agree with — more on that shortly. On a positive note, products from EWS don’t result in a strict “yes” or “no” for approval.

Instead, the goal is to help financial institutions provide potential customers with products that are right for them and that the bank feels comfortable offering. EWS can very easily affect your access to bank products, so it’s vital to know exactly what happens throughout the process.

How can EWS affect you?

The biggest impact caused by Early Warning Services is that you can be denied the ability to open a bank account, whether it’s for checking, savings, or even a more sophisticated product. On top of that, you may even have your account shut down after it’s been open.

There are reports of people getting approved for a bank account only to have it closed soon after when another bank department (typically loss or fraud prevention) runs the EWS software. You may also have checks that you’ve written denied because of EWS.

Many people in EWS aren’t running money laundering schemes or a counterfeit currency shop in their basement. Unfortunately, you can be reported in EWS for something extraordinarily small, like a small fee owed to a former financial institution. Even if you’ve since paid the fine, the listing could still remain on your EWS report.

If this has happened to you, whether for large infractions or small ones, there is a solution. You can apply for a second chance bank account at a financial institution specializing in this area.

There are a number of banks providing this type of account, often with no fees or few other requirements. If you’re having trouble opening a bank account due to EWS, TeleCheck, or ChexSystem, then you could potentially benefit from a second chance account.

What is the difference between EWS, ChexSystem, and TeleCheck?

With all of these companies reporting to banks, it can be difficult to keep track of them all. Some banks use EWS, ChexSystem, and TeleCheck, while others may only use one or two. ChexSystem is the most widely used risk detection program for financial institutions; however, the entire industry is gaining popularity.

The biggest difference is how your information is reported to the bank. Early Warning Services, for example, provides a simple form with your relevant financial history on it. ChexSystems, which is used by 80% of banks in the U.S., includes a summary in their evaluation.

TeleCheck provides a risk score in addition to a form and summary. In essence, these three companies are extremely similar, especially from the consumer’s perspective. But if you’re denied a bank account, it’s important to know which service was used so that you can check (and potentially dispute) your history with the right one.

How do you access your EWS report?

If your account application is denied because of information from Early Warning Services, you have the right to a free report from the company so you can see why you weren’t approved. Like a ChexSystem report, your EWS report lists out any negative information regarding your banking past.

This includes all the risk detection points we talked about earlier, like fraud and bank account abuse. Rather than ignoring the problem and remaining unbanked, take the initiative to find out what exactly is on your report. If it’s inaccurate, you can get it taken care of so you can start banking.

To receive a copy of your report, you can contact Early Warning Services directly. Visit their Consumer Services web page to print off the Identification Form. You can then either create an online account and submit it electronically or mail it to the following address:

Early Warning
Attn: Consumer Services Department
16552 N. 90th Street
Scottsdale, AZ 85260

Alternatively, you can fax the form to (480) 656-6850. To contact EWS with questions, call them at 1 (800) 325-7775.

Once you receive your report, you’ll find any negative information listed out by each bank account. It will include your personally identifying information as well as the contribution reason explaining why the account is listed.

The report also lists out any former disputes you’ve initiated and any rebuttals if a dispute has been denied. That way, future banks can at least see your response to the previous bank’s accusations.

Can you dispute your EWS record?

Once you review your EWS record, you may find that you disagree with one or more of the negative listings. If the information is accurate, particularly surrounding past bank fraud, it may be difficult to get the data removed.

However, if the listing refers to old unpaid debts or fees that have since been repaid, you may successfully get those removed. EWS provides a dispute checklist to guide you through the process.

You’ll need to provide some basic information regarding the account in question. At a minimum, you can expect to pull together:

  • Your consumer ID number from EWS
  • Specific information on the account in dispute, including the account number
  • Why you’re initiating the dispute, including reasons the listing is incorrect or incomplete
  • A description of each dispute, each signed on a separate piece of paper
  • Relevant details about the account in question
  • Supporting documentation to back up your claim (send copies, not originals)

Within 30 days, you should hear back on the results of your dispute. If your request has been granted, the relevant negative item should be removed from your report. It may then be worth reapplying for a bank account.

If your request has not been granted, you may submit a rebuttal. This appears as the last line of the entry so that a bank can use their own best judgment in reviewing your application. You can submit it in the same manner as the dispute form. Note that a rebuttal may not contain names of individuals or businesses or profanity.

How to avoid scams surrounding Early Warning Services

When it comes to the financial services industry, you can bet there’s always someone trying to take advantage of another person in a tight spot. Unfortunately, this holds true if you’re having trouble getting a bank account. There are plenty of fake companies targeting EWS to try and get money out of you. Here’s how to identify such scammers and avoid them entirely.

First, know that EWS must provide you with a free report once a year. If you find a company or website claiming to help you get your EWS information for a fee, they’re probably not legitimate. As you’ve learned, requesting your report is easy and free.

Another scam tactic to look out for is someone contacting you to collect money that is allegedly on behalf of Early Warning Service. EWS is simply a consumer reporting company and any business acting otherwise should be reported to the Consumer Financial Protection Bureau.

Finally, watch out for companies that want to dispute negative EWS listings on your behalf. This is especially true if they guarantee results. There’s no way to guarantee that you’ll get your EWS report cleared of negative items.

You’ll likely end up paying an expensive fee for something you could’ve done on your own. Or worse, you’ll pay and then not hear back from the company at all. Trust your gut when it comes to protecting your financial information. You don’t want to hand out your hard-earned money or your personal data. When fixing your report, work directly with EWS.

Bottom Line

Early Warning Service attempts to provide banks and other financial institutions with risk assessment tools. But like with all data collection efforts, not everything is done correctly. Computers may be great, but they don’t always tell the full story. Instead of assuming that you can never qualify for a bank account, stay on top of your EWS report.

You may be surprised to learn that your banking history isn’t actually represented accurately. If that’s the case, it’s your right and responsibility to get it fixed. While results are never guaranteed, you need to know what personal and financial information about you is being collected and distributed.