See recommendation #4 for an explanation of why
this may be all you need.
Skip the bank and go direct! If you have
direct deposit, then you can get a debit
card provided directly by
For Directo -- you would want to contact your
employer's Human Relations department to
see if they use or will consider using Directo.
The Federal Reserve is
promoting Directo even.
Additionally, banks themselves are starting to
offer these -- as reported in
this April, 2002 article as well as this older
August, 2001 article. The interesting
item is that they are considering offering
"convenience checks" for use at merchants
where debit cards are not accepted for payment.
That's more like it!
Overdraft protection? Re-apply without it.
Sometimes people are denied an account only because
they had indicated on their application that they
would like the overdraft protection option.
When your application includes this request, the bank
will often verify your credit in addition to
verifying your ChexSystems record. If you have
both bad credit and a negative ChexSystems record,
then the bank is more likely to reject your application.
If this could be what happened, then you will want
to simply leave off the overdraft protection request
But consider this: the computer systems used
at some banks know if you've already applied recently,
and will reject any additional applications automatically.
This may be the case at just the one branch where you
applied, or it may work this way at all of the bank's
branches. At the same time, you need to be aware
of the fact that each time a bank or credit union
requests a copy of your record, that request is tallied
at ChexSystems. If ChexSystems sees three or more
requests in the past ninety days, then that fact alone
carries the same weight as a negative "closed for cause"
Open a Savings Account first.
Some banks don't check with ChexSystems when you
are only opening a savings account.
Hall Of Shame
for a list of banks to avoid.
Having a savings account makes many options
available to you through services such as
which use EFT (Electronic Funds Transfer)
and ACH (Automated Clearing House) transactions.
Do you like working late? Neither does the
accounts clerk at your bank. Arrive 10
minutes before closing time. Sometimes
the person taking your application will cut
corners and might skip the step involving
doing a verification with ChexSystems.
The smaller the bank, the more likely this
Request an "offline" verification.
When a bank verifies you using ChexSystems'
online program, it is a "big net" type of
search. Inform the clerk at the bank that
you believe ChexSystems is mistaken, and that
you wish to request an offline verification.
The search to obtain your record in an offline
verification is more specific as it is performed
manually by a [generally quite stupid] human at
ChexSystems instead of by a computer.
Done this way it is more likely that your
incident, or incidents of others whose names
are somewhat similar to yours, will not be
found. If you suspect that you have become a
victim of identity fraud (e.g., your record
shows incidents reported by banks that you've
never done business with) then you can call
the FTC Identity Theft Hotline at
(877) 438-4338, and the Social Security
Fraud Hotline at (800) 269-0271.
Have your spouse apply separately.
ChexSystems may not be able to match both
spouses to the incident. Have one spouse
apply for an individual account (i.e., not
a joint account) and leave out mention of
the other wherever possible.
If denied, then go to a different bank or different
branch, and have the other spouse apply
for an individual account.
Then once you have an account and have a history
with the bank, they might be willing to convert the
account to a joint account -- even if the second
person on the account has a negative ChexSystems
record. (This technique works particularly well
with online banks and the online units of
traditional banks.) For the record, we do not
recommend that anyone use joint accounts. It is
just a bad idea.
Again, please keep in mind that each time a bank
or credit union requests a copy of your record,
that request is tallied at ChexSystems. If
ChexSystems sees three or more requests in
the past ninety days, then that fact alone
carries the same weight as a negative "closed
for cause" record.
By the way, a "donor" with a bank account can
grant to you
Power of Attorney
which, after being notarized, can be presented to
the "donor"'s bank and will allow you the ability
to endorse deposits and sign checks on the account.
There are significant risks to granting Power of
Attorney so the donor may want to get legal
advice and have these explained in detail.
On a related note ..., if you were reported to
ChexSystems due to a problem with your
spouse's account, and the account was
NOT a joint account, then that is a huge, yet
common, error made by the bank. Sometimes
even a person who is listed as the
"beneficiary" will end up, wrongly, being
reported to ChexSystems. Should either
of these situations happen to you, you will
want to report this to the branch manager
at the bank, to ChexSystems and most
importantly, to the
Federal Reserve Complaints Department
as this practice needs to STOP NOW!.
Anyone with a Mexican ID (obtained from any
Mexican Consulate in the U.S. or from within
Mexico) can walk into any Citibank, Bank of
America, Wells Fargo, or Chase Texas and open
an account. Those with a Mexican Id will
have no social security number. With no
social security number, it is unlikely that
the search with ChexSystems will yield any
negatives (especially if the applicant has
moved since any incidents were reported to
Open a U.S. Dollar checking account at a Canadian
or foreign bank that operates in the United States.
Often people will open an account in
Canada before moving there so this practice isn't
Canadian Banks which will open accounts to United
States residents are Bank of Montreal, Canada Trust,
Scotia Bank, Royal Bank of Canada, Toronto Dominion,
and Canadian Imperial Bank of Commerce (CIBC).
You will need a U.S. driver's license or other
state identification or a passport.
Canadians use a social insurance number instead of
a U.S. SSN (social security number), so you
probably won't even be asked for your SSN.
Government benefits? Request an ETA account!
to find a bank or credit union that offers
ETAs (Electronic Transfer Accounts). Visit our
ETA page which
describes ETAs and how everyone might qualify.
Learn to deal with it.
The suggestions listed above are the "quick fix"
suggestions. If none of them are appropriate for
you, then your remaining options will take significant
time and effort. For instance, about a month will
pass before you will get any reply when communicating
by mail, fax, or over the web with ChexSystems.
So it doesn't matter if the bank screwed up, or if
the incident was a result of a stolen card, or
whatever the reason -- you will need to
deal with the fact that there is no solution
that will get things cleared up immediately.
If you currently are stuck without an account and
are unable to open a new one, then life will become
a bit harder for you.
Cashing your paycheck.
Some people must resort to using check cashing
joints where they pay 2% or more of their check
just to get cash. But if you have access to
the bank that your paycheck is drawn through,
you can visit that bank and cash the check --
regardless of whether or not you have an account
with them. Bring identification with you.
You might also consider asking a friend or
family member to cash your paycheck. However,
most banks today put a hold on deposited funds
five business days as federal law provides,
thus you can really cause problems for someone
else by doing this.
You will be carrying around a larger amount
of cash than you are normally used to.
Please realize the risks of doing this and
take steps to protect yourself.
Paying your bills.
Money orders are available at the post office,
banks, grocery stores, Wal-Marts, and
Prices range from $0.46 each at Wal-Mart, to
$0.80 at the post office, and as much as $2.00
to $5.00 each at your bank. Payment usually
must be made using cash or ATM/debit card only
as credit cards and personal checks are
generally not accepted for the purchase of
money orders. An additional type of check
that is similar to a money order is the
Budgeting your money.
Be prepared for problems by hiding away a cash
reserve. Perhaps your paycheck will get lost
in the mail, or your car will break down on
the freeway. These things happen, and when you
are working with cash only, these situations
can become huge setbacks if you are not prepared.
Amend your report.
Once you have a
copy of your ChexSystems report,
you will want to verify that any "banking institution
incidents" have been amended to read:
"all amounts owed have been paid". This is a
a followup report that your bank files after an initial
report to say that you no longer owe any money on
the account. ChexSystems insists that all member
banks are required to do this, but few banks ever do.
If this happens to you then you should contact the
bank that reported the incident to ChexSystems and
request that they file an update with ChexSystems to
amend your incident to show that "all amounts
owed have been paid" flag. You could also contact
ChexSystems directly for your request to have incidents
amended, but that approach takes significantly more time.
The reason you want to do this is because some
banks will ignore your ChexSystems incidents, as
long as that these incidents show this "all amounts
owed have been paid" flag. After your report
has been amended, then you can try re-applying or
applying at a different bank.
Negotiate a "deal".
If you still owe money to the bank that
reported you, try using that for leverage!
(i.e., "I will gladly pay you for the
overdraft and any fees today -- if you
agree to file a 'deletion' with
ChexSystems!". Or perhaps you can ask for
assurance that they will amend the
incident with ChexSystems flagging it to
read "all amounts owed have been paid".)
Dispute the incident with the reporting bank.
Contact the bank that reported you and
ask that they file a "delete record"
request with ChexSystems. You will need to
give a decent reason why they should go out
of their way to help you -- i.e.,
"please remove the incident reported to
ChexSystems by you as that occurred quite
some time ago and was paid up soon after
I was notified of the problem".
Even though a bank policy might be that
only employees from their "loss prevention"
department are authorized to contact ChexSystems,
the fact is that ChexSystems will accept a call
from any bank employee who knows their banks'
"ChexSystems Security Code" and then the request
for the deletion will be honored.
So your goal should be to find a sympathetic ear
anywhere in the organization who will call
ChexSystems for you.
Remember one (sad) fact:
The squeaky wheel gets the grease!
If you did pay off the amount owed shortly
after being notified, make sure to mention
that fact. Also play off of their sympathy
by explaining how no bank will open an account
for you now. Remember, persistence pays
... and many people who put up enough of a
stink do get listened to, and then the "deletion"
Here's a list of things to do: