ChexSystems And Deluxe Corp.

St Paul, MN-based Deluxe Corporation, started in 1915 and now the world's largest blank-check printer, provides a service to banks called ChexSystems.

This database keeps track of negative information regarding the handing of checking and savings accounts, particularly accounts that were closed due to excessive NSF (non-sufficient funds) activity (i.e. bounced checks), ATM overdrafts, or other types of misbehavior. Most banks (Deluxe claims over 80%) will contact ChexSystems when a prospective customer applies for a new checking account. If you walk into a branch to apply, the person taking your application will call ChexSystems on the telephone right then and there. If you are listed for past closed accounts, then your new account application will nearly always be denied.

There are nineteen million old accounts listed as "Closed For Cause" in the database. Some people do not even know that they have been listed until they attempt to open a new account and are rejected.

ChexSystems also lists recent inquiries resulting from account applications with banks. A bank may become suspicious if they find that you have recently applied for accounts at several other banks over a short period of time. The inquiries include details of exactly what name, address, SSN, driver's license number, etc. were given on the previous applications.

ChexSystems is covered by the Fair Credit Reporting Act as a "consumer reporting agency," so if you are denied any sort of account based on information provided by ChexSystems, you are legally entitled to receive a copy of their file on you. Your request must be to ChexSystems directly, not to the bank you applied with.

While the major credit bureaus keep negative items on file for seven years, ChexSystems keeps items for five years from the date of insertion.

Deluxe also owns the Shared Check Authorization Network (S.C.A.N.), used to verify checks at over 77,000 retail locations. Nearly three billion transactions worth over $175 billion are processed by S.C.A.N. every year. S.C.A.N. will consult the Deluxe database to determine if the consumer has written any unpaid bad checks at other retailers recently, if that specific checking account has already been closed, or if the consumer has a general negative check-writing history. Any of these will result in the check being rejected. The S.C.A.N. system may even become suspicious of checks are presented out-of-sequence (e.g. this is check #500, while the last known check written on this account was #450.) Checks bounced at S.C.A.N.-using retailers may result in being rejected for a new bank account.

Deluxe's main competitor in the areas of new-account and retail verification is a company called Telecheck.

Deluxe's collection agency, National Revenue Corporation (NCR) pursues debts for 30,000 creditors.

Deluxe Data Resources sells detailed consumer demographic information on 100 million households.

The printing division, Deluxe Financial Services, Inc., holds over 117 million check-ordering histories.

More recently, Deluxe has developed a much more sophisticated and detailed reporting system called the Debit Bureau, which claims a billion records, and consolidates data from all of Deluxe's other divisions. the Debit Bureau was created with help from database company Acxiom Corporation, and risk-scoring specialist Fair, Isaac.

It is always best to deal with consumer reporting agencies is writing:

ChexSystems does not have a history of being consumer-friendly, but in April 1999, they finally put up a consumer-oriented Web site (which, perhaps tellingly, they don't seem to have promoted to the search engines):

ChexSystems "Consumer Debit Resource" Site

For more background:

Deluxe Corporation

Deluxe Business Checks And Forms

For a company that is so suspicious of everyone else, Deluxe has itself done something rather suspicious. Their business checks and forms site, Delforms, contains a link to Deluxe-owned, Colorado Springs, CO-based Checks Unlimited, (formerly known as Current Checks) and markets blank checks directly to consumers via mail-order, rather than through banks, as the main Deluxe printing operation does. Also, there is a Current Checks catalog site. But the sites do not mention its Deluxe connection anywhere. Perhaps they realize that some consumers may be specifically looking for an alternative to Deluxe (possibly as a result of their database activities), and are attempting to give the impression of a separate company(?) Order information from the Current Checks division will certainly end up in the Deluxe Debit Bureau database.

Possible Non-ChexSystems Banks

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