Picture this: It’s early December, you received a nice holiday bonus and you’ve just spent the entire day knocking out your shopping for everyone on your list. Fantastic!
After finding that perfect gift for each person, you make your way through the store up to the front. It’s been a long day of shopping, but you’ve taken your time, played it smart, and are making sure you get the best possible deal on everything in your cart.
As an attendant is loading everything into your cart, you inform the cashier that you’ll be paying by check — and that’s where something unexpected happens. After handing over the freshly-written check, there’s a quick scan and an awkward pause from the cashier. She lowers her voice and politely informs you that they won’t be able to accept the check and will need another form of payment or everything else will need to be put back.
What happened? You know you have money in your account. Why didn’t the store accept your check?
Well, there are some companies behind the scenes telling retailers whether they should or shouldn’t accept checks, and, unfortunately, you’re not likely to hear about them unless something goes wrong. Certegy is one of those companies. Let’s take a closer look.
What is “Certegy”?
Certegy Payment Solutions, LLC is a “check risk management company that provides verification, guarantee and risk analytics to thousands of businesses that choose to accept checks as a form of payment.”
Retailers and other merchants can use Certegy Check Services and other companies to evaluate how risky a particular consumer’s check is to accept and will determine at point-of-sale (POS). When a customer pays for goods or services with a check, retailers scan it through the system for Certegy to review and analyze how risky it is. After scanning the check, the cashier will instantly know whether they can accept the check or not.
Some well-known companies using Certegy include:
- Costco
- Food Lion
- Harris Teeter
- Kroger
- Publix
- Big Lots
- Dollar General
- Walmart
- Rite Aid
- Walgreens
- ACE Cash Express
- United Check Cashing
- Money Mart
- Check ‘n Go
- Lowe’s
- Staples
- Best Buy
- And many more…
How Does Certegy Work?
Any time you choose to use a check as payment with a merchant that utilizes Certegy, the information on your check is scanned and run through Certegy’s verification system. Certegy then uses the information in its system to analyze the riskiness of accepting your check. After scanning, Certegy will let the merchant know whether they should — or should not — accept your check.
Details about Certegy’s verification system are not publicly known for security reasons. If Certegy were to release specifics about its system, it would allow fraudulent checkwriters and other bad actors to learn how to bypass the system. According to the Certegy team, they use “proprietary risk models for the decisionsing process regarding the acceptance of checks. Certegy’s risk models are based upon factors that closely model previous transactions that resulted in losses for our merchants.”
However, we do know some limited details about how the proprietary risk models work. Consumers do not need to worry about their credit score affecting verification outcomes.
Certegy looks at previous transactions and patterns of check writers and uses them for statistical analysis compared to all other checks that have passed through the system rather than things like credit card usage or payment made with other methods. With that in mind, even if your credit is less than stellar, consumers can rest assured it won’t be the determining factor during verification.
Why Would Certegy Reject My Checks?
As mentioned above, the specifics behind Certegy’s proprietary risk models are not known. However, our research shows there are some common factors likely to affect the results of check verification.
Here are some of the main reasons your check may be denied by a vendor. It’s important to ensure you’re familiar with them to not only be aware of your standing but to see if there are any issues you can remedy.
1. Lack of History on File
If you don’t write checks often — or have never used one before — then Certegy may flag you as a risk. Unfortunately, there’s not much that can be done in this situation as it’s related to the age-old question of the chicken or the egg.
If you don’t have a successful history of paying via check, how can retailers know your check will be good? And yet, if you can’t pay with a check then how will you establish a good check payment history?
This risk factor can only be remedied by creating a successful history yourself. If you have no history of using checks, this can be done by using a check for less expensive purchases first to establish a positive history. It’s likely not the best idea to write your very first check for a $1,000+ purchase.
2. Unpaid Debts
Alternatively, if you have a negative history with financial institutions, your check may be denied by a merchant. This could be due to a variety of unpaid debts in the past including unpaid savings or checking accounts closed with negative amounts.
While Certegy may not always contact your financial institution, their official site states: “Depending on the specifics of your check transaction, we may attempt to verify funds with your financial institution.” This could be in relation to your current account or a history of account misuse.
3. Human Error
Though we rely heavily on technology for financial transactions in today’s increasingly tech-driven economy, there remains a human component. As we all know, humans aren’t perfect beings and a check being declined by Certegy may be caused by human error.
Cashiers deal with transactions and customers all day and a mistake or two is nearly inevitable at some point. Perhaps a cashier accidentally entered incorrect information from you in Certegy’s POS device. Beyond the POS, other information may have been entered into the system incorrectly prior to you paying in-store. Your identity may have been confused with someone else’s, especially if you have a similar name, address, etc. We can never discount the possibility of human error.
4. Previous (Negative) History With Certegy
The most obvious issue includes consumers who have a negative history with Certegy already. If your information has already been flagged as high-risk by Certegy then you’re much more likely to have a check denied by a merchant. This is dependent on the check writer.
If you have a history of writing bad checks (writing a check with inadequate funds available) or have attempted to “float” a check in the past more than once (you write a check anticipating additional funds to hit your account before it’s cashed), then Certegy is likely to flag your account as high-risk and deny your check. Even if previous infractions have been paid, this can still heavily affect you.
5. Previous Cases of Fraud (Even If You Were the Victim)
This one may be less obvious but can still affect the chances of your check being accepted. Certegy looks not just at previous uses of checks, but the history of fraudulent reports associated with your accounts as well — even if you’re the one who reported the fraud.
If your account(s) has a history of fraudulent reports, identity theft, checkbook thefts, etc., Certegy may flag you as a high-risk check writer and a vendor may deny your payment.
6. Additional Risk Factors
Perhaps the most frustrating reason is “additional risk factors.” Because Certegy’s proprietary risk models are not publicly-known, other factors can affect decisions that you don’t know about.
This last category includes everything Certegy’s models use to calculate the riskiness of a transaction and is not necessarily based on your payment history. For example, if you decide to write a check for a new iPad rather than using a card, Certegy’s system may associate a transaction like this with high-risk behavior — even if you personally have a perfect history of check usage.
Certegy Deny Codes
Technically speaking, under the Fair Credit Reporting Act (FCRA), Certegy isn’t allowed to explicitly accept or deny checks on behalf of customers (merchants using the service). Instead, the company provides “recommendations” based on its risk models. With that in mind, the reasoning behind why Certegy recommends a merchant decline falls into four non-specific recommendations made to merchants as codes. Here’s what they look like:
Certegy Deny Code 1 – Negative Information
Deny Code 1 is typically the most serious indicator of potential check fraud. Merchants see this code when the check-writer who submitted the payment has a negative history in the system or on file. Generally speaking, this means the check-writer has a history of writing bad checks that are likely to bounce or other fraudulent behavior.
Certegy Deny Code 2 – Lack of History
Deny Code 2 is the most common reason for a merchant to deny a check. This code is less an indicator of fraudulent activity from the check-writer and has more to do with potential risks from the merchant in the past and other locations nearby.
The most common reason this code gets triggered is when a writer has little to no history of writing checks or the behavior is out of the ordinary. If you don’t use checks normally and decide to use one to pay for a new expensive item, this code may pop up due to its abnormality, though specifics are not released.
Certegy Deny Code 3 – High-Risk Factors
Deny Code 3 occurs when there are high-risk factors associated with the check or issuing authority itself. Like Deny Code 2, this isn’t related to the check-writer having a negative history on file but rather where the check is coming from.
Some examples of this deny code include the check coming from a questionable financial institution or a country and/or area with a higher-than-normal level of check fraud along with additional risk factors.
Certegy Deny Code 8 – Unknown
Deny Code 8 is the last code on the list and the reasons behind it are unknown. This code could be triggered by a variety of reasons including suspicious or out-of-the-ordinary behavior along with a lack of information available for Certegy to make a confident recommendation to merchants. You may get this code if there is a significant variance in your check-writing frequency.
Can I Dispute Items With Certegy? Can I See What My File Says?
While Certegy is not the same as one of the three main credit reporting agencies like TransUnion, Equifax, or Experian, it’s still considered to be in the same category (consumer reporting agency) in the eyes of the law. This is the same reason Certegy is required to act in accordance with the FCRA. Because of this fact, consumers are entitled to dispute items from Certegy similar to how one would with a credit report.
Because Certegy is a consumer reporting agency, consumers are entitled to a free report from the company. Getting a hold of Certegy’s report on you is the only way to truly get to the bottom of why you’ve had checks denied in the past because of them. By law, Certegy is required to provide you with a free report of your account once every 12 months. You can contact Certegy directly to receive a copy of your report and review the information on it.
When your check is declined by a merchant because of Certegy’s system, you’ll be provided a specific reference number for the transaction. Fortunately, Certegy has made the process easy to look up specifics about the transaction.
If you have your reference number handy, simply visit the Certegy Check Search webpage and enter your number into the lookup box. Alternatively, if you have the check, you can enter the check number, date, and dollar amount to look it up manually.
How Do I Get in Touch With Certegy?
The Fair and Accurate Credit Transactions Act (FACTA) entitles consumers to request a free copy of their Certegy file once during any 12-month period as well as a free copy within 60 days of an “adverse action notice” (i.e. a declined check and reference number provided by Certegy). To request your free report, you have a few different options. However, keep in mind that you are only entitled to request information about yourself and your check transactions — not others.
Request by Writing, Fax, or Phone
Certegy Payment Solutions, LLC
Attn: CFDR Request
P.O. Box 30046
Tampa, FL 33630-3046
Fax: 727-570-4936
Phone: 1-800-237-3826
When contacting Certegy, you’ll need to include your name, address, and qualifying identifying information such as personal bank routing and account number, government-issued ID number, and social security number along with a daytime phone number (Note: You do not need to provide a voided check). You can find a downloadable request form by visiting Certegy’s site to fill it out and send it in.
How Does the Dispute Process Work?
As required by consumer protection laws, Certegy must investigate any and all disputes filed with the reporting agency within the same time frame as other agencies like TeleCheck and ChexSystems. If one of your checks was declined due to a decision by Certegy, you have 60 days from the transaction to request a report for free. Certegy then has 30 days to respond. If you requested a free report as you’re entitled to in any given 12-month period, Certegy has 45 days to respond.
If you find something you believe to be inaccurate, you may respond with a dispute. Certegy will work to verify the information provided to them by the source which originally reported you. If you still haven’t received an answer from Certegy in 30 or 45 days after you received a dispute letter, the agency must remove the entry from your file.
This process, much like debt validation/verification for a credit report, is called “validation” and can have a major impact on your record with Certegy. Keep in mind that the validation process only works in your favor if there is an issue with Certegy’s records. If you file a dispute and Certegy can validate the blemish on your report, it will stay there. However, if anything is found to be inaccurate or unprovable, then the item will be removed.
As always, it’s key to remember your rights and to act accordingly — it could be the difference next time you’re in the grocery store and try to pay with a check!
Is Second Chance Banking Right For You?
If you continue to have problems with Certegy, “Second Chance Banking” may be the answer for you. While most major banks don’t offer second chance checking, many community banks and credit unions have them under various names, such as Opportunity Checking and Fresh Start Checking.
Our editorial staff regularly updates the list of banks offering second chance checking in every state. Here’s an overview of these accounts and where you can find them at branches in your area.
