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Dealing With ChexSystems? Make Sure They’re Following Federal Laws

Dealing with ChexSystems can make you feel powerless. After all, this is the company that has been keeping you from opening a bank account, causing all sorts of aggravation for you, and continuing to do so for the next five years. But, even though it may feel like it, ChexSystems does not have unlimited power. In fact, there are several major federal laws that they have to follow.

ChexSystems is not a credit bureau; rather, the company is a consumer credit reporting agency. However, ChexSystems is still regulated by the Fair Credit Reporting Act (FCRA) – the same federal laws that the credit bureaus have to follow.

As part of the FCRA, you have the right to dispute your listing in ChexSystems. And, ChexSystems is required by law to give you a copy of your report if you ask for one. Once you receive the report, you have every legal right to challenge the accuracy of anything that’s in it.

If you do decide to challenge the validity of your ChexSystems report, you will have to do so in writing. However, thanks to the FCRA, once ChexSystems receives your letter, the company only has 30 business days to investigate the disputed items. If they do not complete their investigation in a timely manner, they may be required to remove your name from their database – even if everything in it is true.

According to the FCRA, anything that is not 100% accurate in your ChexSystems report must be deleted. So, if the report says that you incurred a bunch of overdraft fees on November 10th – when it really happened on December 10th – that would not be a 100% accurate statement, and ChexSystems would be bound by law to delete that portion. That’s why it is so important to scour your ChexSystems report as soon as you get it. Simple mistakes in the reporting process may result in your name being removed from ChexSystems altogether!

Additionally, ChexSystems is required to make additions to your report, if circumstances warrant it. For example, if you paid back all of your overdraft fees to the bank after you were reported to ChexSystems, they do not have to remove you from the database – but ChexSystems is required to put a note in your file that says you have paid off all of your existing balances.

But the FCRA is not the only federal law that ChexSystems must abide by. Since ChexSystems is also allowed to function as a collection agency for its members, the ChexSystems Collection Agency is bound by the Fair Debt Collection Practices Act (FDCPA).

Thanks to the FDCPA, the ChexSystems Collection Agency cannot hound you unnecessarily. While they are allowed to contact you and tell you to repay your debts, there are also certain rules that they have to follow, including:

  • ChexSystems cannot call you at unreasonable times, like late at night or early in the morning. The FDCPA says they cannot contact you before 8 AM or after 9 PM, unless you specifically state otherwise.
  • ChexSystems cannot call you at work, unless you give them permission to do so. They also cannot contact your employer to tell them that you have outstanding debts.
  • ChexSystems cannot use false threats in an attempt to intimidate you into paying your debts. For example, a ChexSystems employee cannot tell you that you will be arrested if you do not make payments. The ChexSystems employee also cannot claim to be an attorney or government official.

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