How To Dispute Information On ChexSystems

If you were denied a bank account — or if a retail business refused your check — because of your negative banking history, don’t lament the rejection right away. You may simply be the victim of inaccurate information being relayed to ChexSystems, the consumer reporting agency that keeps tabs on checking and savings account activity.

>> MORE:  Need a Fresh Start? Here’s The BEST Second Chance Checking Account. No Minimums, No Monthly Fees, and a Free Visa Card!

Although that’s bad news — you can’t have yourself “removed” from ChexSystems — the good news is you can get back into the good graces of the mainstream financial industry by requesting removal of the error to restore a clean banking history. Left undisputed, however, the information will stay on your report for five years. Until then, you can continue being turned down by banks.

Review Your ChexSystems Report for Errors

Before you can dispute any inaccuracies, you need to know what is listed on your ChexSystems report. Under the federal Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer report once every 12 months or if you’ve been denied a new bank account in the past 60 days.

You can request your free copy in one of four ways described in the table below. Once ChexSystems receives your request, it will send a copy of your report along with a Customer ID (which you’ll later use in your dispute letter) within approximately five business days.

MethodWhat You Need to DoContact Info
OnlineComplete an Online Request Form.consumerdebit.com
By PhoneFollow instructions of the automated system.800-428-9623
By FaxPrint and complete an Order Form.602-659-2197
By MailPrint and complete an Order Form.Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125

The FCRA requires consumer reporting agencies to list only accurate information in consumer reports. Let’s assume you’ve satisfied an outstanding debt with your bank, but ChexSystems continues to report the debt as “outstanding.” That report is inaccurate. ChexSystems is legally obligated to delete the record if your bank can’t confirm that your debt is “unpaid,” which might be the case if you’ve already satisfied it.

Examples of common errors found in ChexSystems reports include the following:

  • Fraud – Your checkbook is stolen and the thief passes bad checks in your name.
  • Identity Theft – A thief opens a new account in your name and abuses it.
  • Bank Mistake – Your bank fails to update the status of a previously delinquent account or reports the wrong date of an account delinquency.

Once you have a copy of your ChexSystems report, check it carefully for errors.

  • If You Find a Possible Error: Follow the instructions in the next section of this guide to successfully dispute the inaccuracy.
  • If Everything Looks Right: You have the following options:
    • Pay Off Your Debt: If you can afford to pay an outstanding debt that is listed on your ChexSystems report, offer to pay your bank the entire amount. Make sure you obtain proof of payment and a written agreement from your bank that it will delete the information or update the status of your debt as “paid” in ChexSystems. The written proof is critical. Then request an updated ChexSystems report that reflects the change or removal.
    • Seek Checking Alternatives: If adverse information in your banking history is still preventing you from opening an account, your next best option is to open a second chance checking account or to get a prepaid card. Both products offer the same features as regular checking but with certain limitations, such as the lack of a physical checkbook with prepaid cards.

How to Dispute an Error on Your ChexSystems Report

Under the FCRA, both ChexSystems and the furnisher of information (i.e., your bank) are bound by the same dispute rules. That means you can initiate a dispute with either, though we recommend disputing with both.

Before proceeding with the steps below, be sure to make photocopies for your records of all documents, including your ChexSystems report, letters you compose, forms you submit and additional enclosures substantiating your claim.

For each of the letters referenced below, sample language is available in the section titled “Sample Dispute Letters.”

Step 1: Mark the Potential Error in Your Report

On both the copy and original of your ChexSystems report, highlight or circle the listing you believe is inaccurate. Keep your originals and send copies to ChexSystems and the bank.

Step 2: Write a Request for Validation Letter

In a “Request for Validation” letter addressed to ChexSystems or the bank:

  • State which information you believe is inaccurate. Be as clear as possible in your explanation, and itemize each possible error. (Make sure to include copies of documentation supporting your claim.)
  • Request validation of the information from the bank that reported it and to send copies of corresponding documentation bearing your signature.
  • Request deletion or correction of the inaccurate information.

Step 3: Complete a Verification Request Form

For a dispute with the bank, you can skip this step. Otherwise, fill out a “Consumer Request for Reinvestigation” form to send with your dispute materials to ChexSystems.

Step 4: Mail Your Documents

For a dispute with ChexSystems, send your annotated ChexSystems report, dispute letter, Consumer Request for Reinvestigation form and all other enclosures via Certified Mail (with a request for a return receipt) to:

ChexSystems, Inc.
Attn: Consumer Relations
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125

For a dispute with the bank, send your materials (minus the Consumer Request for Reinvestigation form) to the bank’s address also via Certified Mail with a request for a return receipt.

Step 5: Wait for a Response

Upon receiving your documents, ChexSystems and the bank will each have 30 days (21 days for Maine residents) to investigate and send you its formal response:

  • If you do not receive a response within that timeframe, the notation must be deleted, as required by law. If 30 days pass without any action, proceed to Step 6.
  • If ChexSystems or the bank responds that the notation is indeed inaccurate but doesn’t delete the listing, proceed to Step 7.
  • If ChexSystems or the bank determines that the record is accurate, it will not remove the listing. If you disagree, consider your alternatives in the section titled “What to Do If Your Dispute Is Unsuccessful.”
  • If ChexSystems or the bank confirms that the record is indeed inaccurate and removes the listing or corrects the deficiency, congratulations. With its response, ChexSystems or the bank must furnish an updated copy of your ChexSystems report showing the error was properly corrected.

Step 6: Send a “Demand for Removal” Letter

In the event that you do not receive a response within the allowed time for investigation, you can send a second letter called “Demand for Removal.” A lack of response usually indicates that the source did not perform an investigation. In this case, ChexSystems or the bank must delete the record, regardless of its accuracy.

Step 7: Send a “Procedural Request” Letter

You can send a “Procedural Request” letter if the notation was verified as an error but not deleted.

In your letter, ask ChexSystems or the bank to supply the results as well as the name, address and phone number of each source of information. You are also entitled to a free copy of your report if any change is made.

What to Do If Your Dispute Is Unsuccessful

Sometimes, ChexSystems investigations do not resolve disputes, and even the rinse-and-repeat approach we outlined above may not work.

However, you still have options:

Add a Consumer Statement to Your File:

You’re entitled to add a brief statement describing your dispute to your ChexSystems file.

To do so, you’ll need to complete a Request for Consumer Statement form, write a statement to ChexSystems (visit ChexSystems Consumer Assistance for rules on writing your statement), and mail your documents to:

ChexSystems, Inc.
Attn: Consumer Relations
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125

File a Formal Complaint with a Regulator:

If your financial institution or ChexSystems fails to comply with the procedures outlined above, you can contact the organizations in the table below for help. You will need copies of your communication with ChexSystems and/or the financial institutions involved in the dispute.

Agency/RegulatorApplies to
Office of the Comptroller of Currency (OCC)Nationally chartered banks (If you’re unsure whether your bank is nationally chartered, you can look it up on the OCC website.)
National Credit Union Administration (NCUA) Nationally chartered credit unions (You can check on the NCUA website to see if your credit union is nationally chartered.)
Consumer Financial Protection Bureau (CFPB) All consumer financial institutions
State Attorney General’s Office or State Banking CommissionState-chartered banks and credit unions
Federal Trade Commission (FTC)ChexSystems (or other consumer reporting agency governed by FCRA rules, which are enforced by the FTC) and cases of identity theft

File a Lawsuit in Small Claims Court:

Filing a small claims lawsuit for every violation of the FCRA is likely to result in your favor. A lawsuit would require ChexSystems to pay an attorney to litigate and award you for FCRA violations (each valued at $1,000). However, ChexSystems probably won’t want to do so. Instead, it will try to settle your case outside of court and remove the record against you.

Prior to filing a lawsuit, the FCRA requires that you dispute with ChexSystems. Legal action should be a last-ditch effort, and we strongly advise consulting an attorney or your local legal aid office beforehand for advice on how to file a lawsuit in small claims court.

Tips for Successfully Disputing Errors

There’s a good chance that ChexSystems or the reporting bank will ignore your dispute unless you can make a strong case. Follow the tips below to help you get the results you want.

  • Know Your Rights: Under the FCRA, both ChexSystems and the bank that reported the derogatory information are responsible for correcting inaccurate or incomplete information in your consumer report. Remember that if ChexSystems does not respond to you within 30 days of receiving your dispute letter, it is legally obligated to remove the negative record from your report. You can read a summary of your consumer rights under the FCRA, which will serve you well in your case as well as if you decide to take legal action.
  • Document Your Communication: Make sure you write down the details of every call or interaction, including the names of the people you speak with, dates of your interaction, phone numbers, addresses and what was discussed. You may need these in court later.
  • Keep a Paper Trail: Besides documenting your communication, you’ll want to make copies of all the paperwork you send to or receive from ChexSystems and the financial institution(s) that reported you.
  • Leverage Your Bankruptcy Filing: If you’ve filed for bankruptcy, you can request that ChexSystems delete your record by mailing or faxing them a copy of your bankruptcy filing or discharge document.
  • Beware of Scams: The Internet is littered with “ChexSystems removal services” that will promise to help you remove your name from ChexSystems for a fee. These are scams because these companies won’t be able to remove accurate information and can’t help you remove errors any faster than you can on your own. If you feel uncomfortable handling the dispute on your own, you should consult an attorney with banking expertise, visit your local legal aid office if you have low income or seek credit counseling.
  • Be Thorough: Upon receiving your dispute, both ChexSystems and the bank will have 30 days (21 days for Maine residents) to report back to you with their findings. If you provide additional information for your case during that 30-day period, the investigation can extend to 45 days under federal law, so make sure you send all relevant information and documentation in your initial mailing to prevent your case from exceeding the 30-day window.

Sample Dispute Letters

The letters below are samples only, and you will need to tailor them according to the circumstances of your case. If you are disputing with both ChexSystems and the bank, you will need to create separate letters for each and address them to the appropriate recipient.

Request for Validation Letter

This is the first — and hopefully last — letter you will send to ChexSystems or the bank to initiate your dispute. More details regarding this letter can be found under “Step 2” in the section above titled “How to Dispute an Error in Your ChexSystems Report.”

Date

ChexSystems, Inc.
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125
Fax: (602) 659-2197To Whom It May Concern:

I was recently informed of negative information reported by [Name of Bank] included in the file ChexSystems maintains under my Social Security number. Upon ordering a copy of the report, I found an entry from this bank listing a [negative item listed] in [month and year of listing].

I am unaware of ever having a [item] from this [bank/Credit Union].

Please validate this information with [Name of Bank] and provide me with copies of any documentation associated with this “[item]” bearing my signature. In the absence of any such documentation, I ask that this information be immediately deleted from the record you maintain under my Social Security number and provide an updated report.

For your reference, my personal information is as follows:

SSN: XXX-XX-XXXX
Your Address

Sincerely,

Your Signature
Your Printed Name

Enc.: [Any enclosures necessary to include]


Demand for Removal Letter

You will send this letter to ChexSystems or the bank if you do not receive a response to your Request for Validation letter within 30 days (21 days for Maine residents). More details regarding this letter can be found under “Step 6” in the section above titled “How to Dispute an Error in Your ChexSystems Report.”

Date

ChexSystems, Inc.
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125
Fax: (602) 659-2197To Whom It May Concern:

In a letter dated [date of first letter], I requested that you correct the following information in my ChexSystems report:

[Errors indicated in first letter]

To date, I have not received confirmation that you have done so. As thirty (30) days have now passed, this letter is my formal demand to be removed from the ChexSystems database. Please note that your failure to do so violates the Fair Credit Reporting Act.

Please immediately send confirmation of the deletion to the address below. If I do not hear from you within ten (10) business days, I am prepared to take legal action to remedy the situation.

Thank you for your prompt attention to this matter.

For your reference, my personal information is as follows:

SSN: XXX-XX-XXXX
Your Address

Sincerely,

Your Signature
Your Printed Name

Cc: [Attorney’s name, if you have one]

Enc.: [Any enclosures necessary to include]


Procedural Request Letter

You will send this letter to ChexSystems or the bank if the information in your report was verified as inaccurate but wasn’t deleted. More details regarding this letter can be found under “Step 7” in the section above titled “How to Dispute an Error in Your ChexSystems Report.”

Date

ChexSystems, Inc.
7805 Hudson Rd., Ste. 100
Woodbury, MN 55125
Fax: (602) 659-2197To Whom It May Concern:

I am writing in response to your claim that [Name of Bank] has confirmed my unpaid debt. Please note that you have again failed to provide me a copy of the evidence submitted to you by this [bank/credit union].

I request that you provide me a description of the procedure you used to determine the accuracy and completeness of the bank’s information. Please send this information to me within fifteen (15) days of the completion of your reinvestigation. In addition, please provide the name, address, and telephone number of each person you contacted at [Name of Bank] regarding my alleged account.

I also request a copy of any documents submitted to you by [Name of Bank] that bear my signature and show that I have a legally binding contractual obligation to pay them.

Be aware that this is my final goodwill attempt to have this matter resolved. As it now stands, the information you have presented to me is inaccurate and incomplete and represents a serious error in your reporting.

It is my understanding that your continued failure to comply with federal regulations can be investigated by the Federal Trade Commission (see 15 USC Section 41). For this reason, I am maintaining a careful record of my communications with you should I need to file a complaint with the FTC and the state of [your state] Attorney General’s office.

If you do not respond within ten (10) business days, I am prepared to take legal action against your company for causes of action including, but not limited to, defamation, fraud, and violations under the Fair Credit Reporting Act.

For your reference, my personal information is as follows:

SSN: XXX-XX-XXXX
Your Address

Sincerely,

Your Signature
Your Printed Name

Cc: [Attorney’s name, if you have one]

Enc.: [Any enclosures necessary to include]